USA V Mangano Doc 80 - Motion Unredacted

Case 2:16-cr-00540-JMA-SIL Document 80 Filed 08/28/17 Page 1 of 255 PageID #: 1642
UNITED STATES DISTRICT COURT FILED

EASTERN DISTRICT OF NEW YORK IN CLERK'S OFFICE
U.S. DISTRICT COURT E.D.N.Y.
-----------------------------------------X
UNITED STATES OF AMERICA
Ind. No. 16 CR 540
* AUG 28 2017. *
-against-
LONG ISLAND OFFICE
EDWARD MANGANO, NOTICE OF MOTION
LINDA MANGANO and
JOHN VENDITTO,
Defendants.
--------------------------------------------------------X
PLEASE TAKE NOTICE, that upon the annexed affirmation of Kevin J. Keating, attorney
for Edward Mangano in the captioned matter, the Memorandum of Law offered in support, and
the accompanying exhibits, the undersigned will move before the Hon. Joan M. Azrack at a date
and time to be fixed by the Court, at the United States District Courthouse located at 100 Federal
Plaza, Central Islip, New York 11722 for an Order, ( 1) dismissing Counts 1, 2 and 3 of the
Indictment as duplicitous; (2) dismissing Counts 1 and 2 of the Indictment as they charge Edward
Mangano in connection with transactions before the Town of Oyster Bay as the Indictment fails to
allege Mangano to be an agent of the Town of Oyster Bay as required under 18 U.S.C.666, and
a portion of the alleged conduct constituting these Counts falls outside the applicable statute of
limitations; (3) dismissing Counts 3 and 4 of the Indictment to the extent that they charge Mr.
Mangano with depriving the Town of Oyster Bay of its right to honest services as the Indictment
fails to allege a fiduciary relationship between Mr. Mangano and the Town as required under 18
U.S.C. 1343 and 1346; (4) dismissing Counts 3, 4 and 6 of the Indictment as they relate to the
Town of Oyster Bay concession agreements as Mr. Mangano cannot "pressure or advise" a Town
of Oyster Bay official, pursuant to McDonnell v. United States, 136 S. Ct. 2355 (2016), and United
States v. Birdsall, 34 S.Ct.512 (1914), and their progeny; (5) precluding the Government from
proceeding on a legal theory under Counts 3, 4 and 6 of the Indictment that the ultra vires
2011/2012 Town of Oyster Bay concession agreement amendments constituted ''official acts"
under McDonnell v. United States, supra.; (6) directing disclosure or review of the Grand Jury
minutes in this matter pursuant to F.R.C.P. Rule 6 (e)(3) (E)(ii); (7) severing the trials of Mr.
Mangano and Mr. Venditto as they have been misjoined under F.R.C.P. Rule 8 (b), and their
defenses are antagonistic, pursuant to F.R.C.P. Rule 14 (a); (8) dismissing the Indictment, or the
granting of discovery, based upon impermissible selective prosecution; (9) directing the
Government to supply a Bill of Particulars, and ( I 0) directing the Government to promptly produce
all material pursuant to Brady v. Maryland, 83 S Ct. 1194 (1963).
For the reasons advanced herein, the requested relief should be granted.
Dated: August 25, 2017
Yours, etc.
KLLJ.!lia
Attorney for Edward Mangano
666 Old Country Road-Suite 501
Garden City, NY 11530
To: Clerk of the Court

AUSA Mirabile
AUSA Tierney
AUSAGatz
Clerk of the Court
Mark Agnifilo, Esq.
John Carman, Esq.
UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK
---------------------X
Ind. No. 16 CR 540
-against-
EDWARD MANGANO, AFFIRMATION

LINDA MANGANO and IN SUPPORT OF
JOHN VENDITTO, OMNIBUS MOTION
Defendants.
------------X
KEVIN J. KEATING, an attorney duly authorized to practice law before this Court,
hereby affirms the following under the penalties of perjury:
1. I am counsel for the Defendant Edward Mangano in the above captioned matter. I
am submitting this affirmation in further support of Mr. Mangano's omnibus motion.
2. Attached hereto as Exhibit A is a true and correct copy of a civil complaint filed
by the Town of Oyster Bay against Harendra Singh, Frederick Mei, Harris Beach, PLLC, and
others. The complaint outlines the factual circumstances surrounding the 2010, 2011 and 2012
amendments to the Town of Oyster Bay concession agreements referenced in the Indictment of
this matter. The civil complaint was filed in Nassau County Supreme Court on or about June 26,
2017, under index number 606132/2017.
3. Attached hereto as Exhibit B is a true and correct copy of the June 8, 2010
amendment to the ToBay Beach concession agreement between the Town of Oyster Bay and
Harendra Singh's business, SRB Concession & Catering Corp ("SRB"). Upon information and
belief, this amendment was both signed by John Venditto and duly approved by the Oyster Bay
Town Board.
4. Attached hereto as Exhibit C is a true and correct copy of the purported
November 18, 2011 amendment to the Woodlands concession agreement, between the Town of
Oyster Bay and SRB. Upon information and belief, this amendment was neither signed by John
Venditto nor duly approved by the Oyster Bay Town Board.
5. Attached hereto as Exhibit Dis a true and correct copy of the purported June 19,
2012 amendment to the ToBay Beach concession agreement between the Town of Oyster Bay
and SRB. Upon information and belief, this amendment was neither signed by John Venditto
nor duly approved by the Oyster Bay Town Board.
6. Attached hereto as Exhibit Eis the transcript from the July 12, 2016 deposition of
Nelson Correa, Senior Managing Director at Phoenix Life Insurance Company, the lender which
extended loans to SRB in 2011 and 2012.
7. Attached hereto as Exhibit Fare relevant pages from the July 14, 2016 Affidavit
of Gavin Shea, an investigator with the Nassau County District Attorney's Office. At page 21 of
the affidavit, Mr. Shea transcribes a recorded conversation in which Frederick Ippolito, the
former Commissioner of Planning and Development for the Town of Oyster Bay, discusses the
circumstances surrounding the November 2011 and June 2012 amendments, attached hereto as
Exhibits C and D. I have not included the entirety of Mr. Shea's affidavit because it is over 80
pages long.
8. Attached hereto as Exhibit G is the May 30, 2017 Decision and Order of the
Honorable Sandra Feuerstein in the matter of PHL Variable Insurance Company v. Town of
Oyster Bay, 16-CV-4013. In that Decision and Order, Judge Feuerstein dismissed the complaint
brought by the PHL against the Town of Oyster Bay, finding that the plaintiff/lender had failed
to allege facts sufficient to establish a cause of action, and that the November 18, 2011
amendment to the Woodlands concession agreement (attached hereto as Exhibit C) was not a
valid, binding agreement with the Town of Oyster Bay.

9. Attached hereto as Exhibit H is a June 10, 2012 letter from San Remo Bakery
(controlled by Harendra Singh and his wife, Ruby), withdrawing their bid to supply the Nassau
County Correctional Facility with bread.
10. Attached hereto as Exhibit I is the sworn affidavit of Joseph D. Muscarella, dated
April 25, 2017.
11. Attached hereto as Exhibit J is infonnation relating to Jay Jacobs which was
printed from the official website for the Clinton Foundation. The website indicates that Mr.
Jacobs and/or his foundation have donated somewhere between 1 to 5 million dollars to the
Clinton Foundation.
12. Attached hereto as Exhibit K is a March 9, 2012 Department of Justice
Memorandum entitled "Election Year Sensitivities".
13. Attached hereto as Exhibit Lis the July 24, 2017 article published by the New
York Times, entitled "The Mayor and the Restaurateur: How de Blasio Sought Help for and
Early Donor."
Dated: Garden City, New York

August 25, 2017
Respectfully submitted,
By: Isl Kevin J. Keating

Kevin J. Keating, Esq.
Counsel for Edward Mangano
666 Old Country Road, Suite 501
Garden City, New York 11530
(516) 222-1099
Case
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201 7
SUPREME COURT OF THE

STATE OF NEW YORK
COUNTY OF NASSAU
TOWN OF OYSTER BAY,
Plaintiff, Index No. _ _ _ __

-against-
COMPLAINT
HARENDRA SINGH, S.R.B.
CONVENTION
& CATERING CORP., SRB
CONCESSION
INC., HVS TAPPAN BEACH
INC., RUBY
SINGH, FREDERICK MEI, HA
RRIS
BEACH, PLLC, WILLIAM J.
GARRY,
PHOENIX LIFE INSURANC
E CO. and PHL
VARIABLE INSURANCE CO
.,
Defendants.
Plaintiff Town of Oyster Bay

(the "Town''), by its attorney,
Joseph Nocella, Town
Attorney, asserts claims agains
t Defendants Harendra Singh
("Singh"), SRB Convention
and
Catering Corporation ("SRB
Cate1i.ng"), SRB Concession
Inc. ("SRB Concession" and,
with
SRB Catering, "SRB"), HVS Ta
ppan Beach Inc. d/b/a HVS Ta
ppen Beach Inc. ("HVS"), Ruby
Singh, Frederick Mei (''M
ei"), Harris Beach, PLLC
("Harris Beach"), William
J. Garry
("Garry"), Phoenix Life Insura
nce Company (''Phoenix Life'')
, and PHL Variable Insurance
Company ("PHL" and, with Phoen
ix Life, "Phoenix"), and alleges
as follows on information and
belief:
NATUREOFTHECASE
I. This case arises out of a conspi
racy orchestrated
by Harendra Singh and Freder
ick
Mei, and aided by Harris Beach
, William Garry, Phoenix, and oth
ers, to misappropriate millions
of dollars from the Town and its
taxpayers through loan guaranty
documents that were concealed
from the Town and that the Defen
dants knew were a sham.
l of so
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2. Starting in 2000, Singh and his companies were

awarded licenses to provide food
and beverage services at certain Town facilities
in exchange for paying license fees to the Tow
n.
As part of his deal with the Town, Singh
also promised to make valuable capital imp
rovements
to the Town's facilities at the concession loca
tions.
3. Between 2011 and 2014, Singh used his oblig
ations to make improvements at
Town facilities as a pretense for securing over
$20 million in loans from various lenders, whil
e
utilizing the proceeds of those loans to line
his own pockets rather than improve Town
facilities
or otherwise benefit the Town in any way.
To make matters worse, to secure the loans,
Singh
misrepresented to lenders that the loans were
backed by guarantees that the Town would
make
good on the loans if Singh ever defaulted
. The guarantees offered to lenders were
entirely
fraudulent, how eve r-ph ony agreements cont
rived by Singh and his co-conspirators and
hidden
from the Town and its governing body (the
"Town Board''). That the guarantees were
the
product of fraud should have been obvious to
anyone with even a cursory understanding of
how
municipalities work, particularly as it is no
secret that such guarantees violate the New
York
State Constitution's express prohibition agai
nst using public money to guarantee the repa
yment
of private deb t Nonetheless, to secure the
financing he needed, Singh, with others nam
ed
herein, contrived to manufacture guarantee docu
ments pw-porting to place the Town on the hook
for millions of dollars that he diverted for his
own personal use.
4. Singh did not act alone. First, he needed a corr
upt insider at the Town. He found
a willing accomplice in Mei, then a Deputy Tow
n Attorney. In a stunning breach of his dutie
s to
the Town, Mei participated in Singh's scheme
by crafting the fraudulent guarantees, givin
g the
superficial appearance of Town support,
procuring sign atur es-i n some cases thro
ugh
demonstrable forgery and tric kery -and conc
ealing Singh' s illicit arrangements from the
Town
2 of SO
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2
Board. Mei was paid handsomely by

Singh for his participation, receiving
all-expenses paid
overseas luxury vacations, a free BMW
car, and straight up cash in exchange for
facilitating the
fraud.
5. Singh was also aided by his long-tim

e transactional attorneys at Harris Bea
ch,
including partner \\Zi}liam Garry. Harris
Beach holds itself out as one of the _foremost authorities
on New York municipal law, and its atto
rneys, including Garry, knew that the
guarantees were
unconstitutional, and in fact acknowledg
ed their unconstitutionality during neg
otiations over the
loans. The firm also knew that, to be
effective, contracts with the Town (inc
luding contracts to
retain outside counsel) had to be approve
d by the Town Board. Despite this,
enticed by the
prospect of earning new business and lucr
ative fees from Singh, Harris Beach not
only signed off
on the scheme but Garry also assisted
in drafting and negotiating the bogus gua
rantee contracts
to create the appearance that it was acti
ng on the Town's behalt: Harris Bea
ch,s and Garry's
claimed representation of the Town was
utterly false, however-tellingly, Harris
Beach never
charged the Town a dime for their so-calle
d "services."
6. Finally, the scheme would not have been
possible without lenders willing to play
along. Phoenix either knew or should
have known from the outsel thal the
guarantees were
illegal-indeed, they were told as muc
h by Harris Beach during the agreeme
nts' negotiations.
Moreover, Phoenix knew that Singh's and
Mei's motives were improper but intentio
nally turned
a blind eye and neither questioned
Singh?s plans for the loan proceeds
nor imposed any
limitations on Singh's use of the fund
s. Phoenix also knew that the Tow
n Board had not
approved the transactions. Nonetheless
, Phoenix rolled the dice on the guarant
ees being a free
option on which to lend money and coll
ect massive above~market interest paymen
ts in the hope
that the Town would make it whole if Sing
h failed to repay his debts.
3 of SO
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7. Singh 's schem e came crashing down around him

and his co-conspirators in
Septe mber 201S when the U.S. Attom ey for the Easte
rn District of New York filed a thirteen-
count federal criminal indictment against him and initia
ted a separate case against Mei relating to
the impro per activities described in this Complain
t. But Singh and Mei were not the only ones
impacted by Singh 's criminal acts. Instead, the Town
has found itself embroiled in a legal and
investigative morass as it attempts to pick up the piece
s and protect taxpayers from the fallout of
Singh 's and Mei' s corrupt scheme. In the two years
since it learned of Singh 's scheme, and
Mei's involvement in it, the Town has been force
d to expen d millions of dollars of taxpa yer
money investigating Singh and Mei, getting new vendo
rs in place to run the Town concessions,
responding to inquiries from law enforcement agenc
ies, and defending itself against lawsuits
brought by Singh's creditors, including Phoenix.
8. By this action, the Town seeks to ensure that it is

Defe ndan ts-th e parties
respo nsibl e-and not the innocent taxpayers of Oyste
r Bay who are held to account for this
mess. The Town therefore brings claims again st
Mei for: (i) acting as a faithless servant, (ii)
breaching his fiduciary duties to the Town, {iii)
fraud, (iv) fraudulent concealment, and (v)
knowingly making, using, or causi ng to be made or used,
a false record or statement material to a
false or fraudulent claim. The Town also brings claim
s against Singh, SRB, and HVS for: (vi)
aiding and abett ing Mei's breaches of his fiduciary
duties, (vii) fraud, (viii) breach of contract,
and (ix) breach of the implied covenant of good faith
and fair dealing, and, against Singh and his
wife and business partner, Ruby, for (x) unjust enrichmen
t and money had and received. Agai nst
Harris Beach and Garry, the Town asserts claim s for:
(xi) aiding and abetting breach of fiduciary
duty, and (xii) aiding and abetting fraud. Agai nst
Phoenix, the Town brings claim s for: (xiii)
aiding and abett ing breach of fiduciary duty, (xiv)
aiding and abetting fraud, and (xv) maki ng
4 of so
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false claims against the Town. Finally, against Mei, Singh, SRB and HVS, the Town brings
claims for: (xvi) implied indemnification, and (xvii) contribution.
The Parties
9. Plaintiff the Town of Oyster Bay is a municipal corporation and incorporated
Town located in Nassau County, New York.
10. Defendant Harendra Singh is a resident of Syosset, New York. At all times
relevant to the claims asserted herein, Singh was both the president and treasurer of Defenda
nts
SRB Catering and SRB Concession. Singh is the president and secretary of INS.
11. Defendant SRB Catering is a corporation organized under the laws of New York.
At all times relevant to the claims asserted herein, SRB Catering was owned by Harendra Singh.
12. Defendant SRB Concession is a corporation organized under the laws of New
York. At all times relevant to the claims asserted herein, SRB Concession was owned
by
Harendra Singh.
13. Defendant HVS is a corporation organized under the laws of New York. At all
times relevant to the claims asserted herein, HVS was owned by Harendra Singh.
14. Defendant Ruby Singh is a resident of Syosset New York and the wife of
1
Harendra Singh. At all times relevant to the claims asserted herein she was the chief executiv
1 e
officer, vice president and secretary of Defendants SRB Catering and SRB Concession and
an
officer of HVS.
15. Defendant Frederick Mei is a resident of Bayville, New York. At all times
relevant to the claims asserted herein, Mei was a Deputy Town Attorney in the Town of Oyster
Bay and duly licensed to practice law in the State of New York.
16. Defendant Harris Beach is New York professional services limited liability
5 of SO
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company with offices in New York, New Jersey and

Connecticut.
17. Defendant Wi1liam J. Garry is a member of Harris
Beach. At all times relevant to
the claims asserted herein, Garry was based in Harris
Beach's Uniondale, New York office and
is an attorney duly licensed to practice law in the State
of New York .
18. Defendant Phoenix Life is a corporation organized
under the laws of New York.
Phoenix life is a wholly-owned subsidiary of Phoe
nix Companies, Inc. and an affiliate of PHL.
19. Defendant PHL is a corporation organized under the
laws of Com ectic ul PHL is
also a wholly-owned subsidiary of Phoenix Companie
s, Inc. and an affiliate of Phoenix Life.
PHL regularly conducts business in New York.
Jurisdiction and Venue
20. This Court has jurisdiction over the Defendants unde

r N.Y. C.P.L.R. 301 and
302 because all of the Defendants are either domiciled
in or transact business in New York.
21. Venue is proper underN.Y. C.P.L.R. 503 because
the Defendants are located in
Nassau County, New York and/or because the wron
gful acts alleged herein occurred in Nassau
County, New York.
FACTUAL BACKGROUND
I. The Tow n's Public Property Concessions
22. The Town owns a number of public beaches, parks

, and other properties that
house public facilities providing food and beverage
services to Town residents and visitors.
These facilities are operated by private vendors, know
n as "concessionaires," through concession
agreements that allow the vendor to operate and colle
ct revenue at the facilities for a fixed period
of time in exchange for paying certain fees to the Tow
n.
23. To be valid under New York law: the Town's concessio
n agreements with private
vendors, like all contracts, must be approved by a resol
ution of the Town Board. Town Board
6 of so
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resolutions are discussed and voted on at publ

ic meetings of the Tow n Board. In order to
ensu re
that all pote nti~ stakeholders are aware of and
able to com men t on Town Board resolution
s, the
agenda of each Tow n Boar d meeting is publ
ished in advance in a notice indicating the date,
time
and place of the mee ting as well as the subj
ect matters to be discussed. Copies of all
Tow n
Board resolutions are available from the Tow
n Clerk.
24. At all relevant times, the Tow n employee with
primary day-to-day responsibility
for liaising between the Tow n and the conc
essionaires, negotia~ing and drafting conc
ession
agreements and amendments thereto on beha lf
of the Tow n, and keeping the Tow n abreast
of
developments with resp ect to the Tow n conc
essions, was Frederick Mei.
25. The Town paid Mei an annual base salary of
approximately $108,038.00 in 2010,
$108,288.00 in 2011, and 2013, and $117,288.00
in 2014 and 2015.
Il. The Town Enters Into Concession Agre
ements With Singh Relating To The
Woodlands Golf Course and TODAY Beach
A. Woodlands Golf Course Concession Agreemen

ts
26. Hare ndra Sing h first became a Tow n conc
essionaire in 2000, whe n one of his
companies, SRB Catering, was awarded a
concession to manage the catering and banq uet
facilities at the To\.Vn of Oyster Bay's Woodlan
ds Golf Course ("Woodlands" or the "Go lf
Course"). Pursuant to an October 30, 2000 agre
ement between the Town and SRB Catering (the
''200 0 Woodlands Agreement"), in return for
paying the Tow n a monthly concession fee, SRB
Catering was authorized to provide catering and
other services at Woodlands for a twenty-year
term commencing on January 1, 2001. SRB
Catering also agreed to make over $2 million in
improvements to the Woodlands facilities.
The 2000 Woodlands Agreement was duly
authorized by Tow n Boar d Resolution No. 638-
2000, adopted by the Town Board on Octo ber
3,
2000.
7 of so
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27. On April 19, 2005, the Town and SRB Catering entered
into an amendment (the
"'2005 Woodlands Amendmenf') to the 2000 Woodland
s Agreement, extending the tenn of the
original agreement for twenty years. The 2005 Woodland
s Amendment was authorized by Town
Board Resolution No. 313-2005, adopted by the Town Board
on April 19, 2005.
28. The Town and SRB Catering entered into a second amen
dment to the Woodlands
concession agreement (the "2008 Woodlands Amendme
nt") on September 16, 2008. In that
agreement, the parties extended the tenn of the concession
agreement in return for SRB Catering
agreeing to make an additional $3 .25 million of capita
l improvements to the Golf Course
facilities. The 2008 Amendment was authorized by
Town Board Resolution No. 889-2008,
adopted by the Town Board on September 16, 2008.
B. TOBAY Beach Concession Agreements
29. Around the same time as the 2005 Woodlands Amendme

nt, the Town entered into
another concession agreement with Singh relating to the
provision of food and beverage services
at the Town's TOBAY beach and marina facilities
on Ocean Parkway ("TOBAyn). This
agreement was with SRB .Concession, another company
owned and controlled by Singh.
30. The concession agreement between the Town and SRB
Concession, dated April
19, 2005 (the "'2005 TOBAY Agreement"), authorized
SRB Concession to provide food and
beverage services at TOBAY for a twenty-year term comm
encing on May 1, 2005 in return tbr
SRB Concession paying the Town a monthly concession
fee. SRB Concession also agreed to
make over $1 million in improvements to the TOBA
Y facilities. The agreement was duly
authorized by Town Board Resolution No. 312-2005,
adopted by the Town Board on April 19,
2005.
31. In September 2008, the Town and SRB Concession amen

ded the 2005 TOBAY
Agreeme~t. This "2008 TOBAY Amendment" extended
the term of the original 2005 TOBA Y
8 of so
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Agreement for twenty years in return for

SRB Con cess ion agreeing to mak e an addi
tional $2.5
million of capital improvements, for a total
of $3.5 million of improvements, to be com
pleted by
April 30, 2015. The 2008 TOB AY Ame
ndment was duly authorized by Tow n Boa
rd Resolution
No. 887-2008, adopted by the Tow n Boa
rd on Sept emb er 16, 2008.
III. Sing h Struggles To Fina nce Capital Imp
rovements
32. By the end of 2008, Singh had thus committ
ed to mak ing millions of dollars of
capital improvements to the Woodlands and
TOB AY facilities.
33. Unable or unwilling to pay for the contractu
ally-required improvements himself,
Singh began reaching out to lenders in early
2010 in the hope of obtaining financing
to fund the
improvements. He faced difficulties raisi
ng capital during the aftennath of the 2008
financial
crisis, however, and soon turned to Mei
for help. At that point, Mei and Singh had
been friends
for many years and, acting in his personal
capacity, Mei had represented Singh and
his wife,
Ruby Singh, and certain of Singh's relatives,
in a num ber of unrelated transactions. Mei
soon
agreed to help Singh obtain financing to
fulfill his obligations at Woodlands and
TOBAY, and
the Town Board also pledged wha teve r lawful
supp ort it could provide. 1
34. Initially, Mei and Singh explored the poss
ibility of the Tow n guaranteeing any
debt incu rred by Singh that was used
to fund capital improvements at the Tow
n's facilities.
They were soon informed, however, that no
such guarantee was penn issib le because
the New
York State Constitution prohi bits municipa
lities from guaranteeing loans mad e to priv
ate parties.
Mei and Singh therefore began to look
to alternative financial structures that coul
d provide
comfort to potential lenders while also
respecting the limits plac ed on the Tow
n by the Stat e
1
The Town's support for Singh's efforts to obtai
n funding to pay for capital improvements at
memorialized in Town Board Resolution No. Town facilities was
256-2010, approved by the Town Roard on Marc
recognized that ''due to the global credit crisis h 23, 2010 which
... it has become very difficult to secure financ 1
the Town Supervisor "to enter into an agreement ing~ and authorized
with [SRB's] bank relating to the loan, and an
Concessionaire regarding the use of the loan agreement with the
proceeds at the [Town facilities), subject to
acceptable tenns in said agreements.'' the negotiation of
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Constitution.
35. By the Spring of 2010, working with the Town's outsid

e municipal lawyers, they
had identified a solution. Recognizing that the existing
concession agreement provided that the
Town would compensate SRB for a portion of the capita
l improvements already completed at the
respective Town-owned concession facilities in the
event of an early tennination of the
concession agreement for that facility, SRB could then
assign the Tow n's payment for those
improvements to its lender as security for repayment of
the loan. When one of the lenders with
whom Singh and Mei had been negotiating agreed
to this structure for a loan to fund
improvements at TOBAY, Singh was able to close on a
$1.5 million loan to SRB Concession.
36. On Jwie 8, 2010, the Town Board adopted Resolution
No. 605-2010 authorizing
the Supervisor "to further amend the [TOBAY and Woo
dlands concession agreements]> in order
to facilitate the concessionaires' ability to obtain financing
to make capital improvements to the
facilities." The Town and SRB Concession then entered
into an amendment to the 2005 TOBAY
Agreement (such amendment, the '&2010 TOBA Y Amendme
nt").
37. Pursuant to the 2010 TOBAY Amendment, the To~
acknowledged that SRB
Concession had already completed capital improveme
nts at TO BAY "of approximately
$1,782,662"-an amount greater than the total value of
the contemplated loan -and agreed that,
in the event of a tennination of the 2005 TOBAY Agre
ement prior to April 30, 2015, it would
compensate SRB for those improvements by making a
termination payment equal to the greater
of (i) $1,500,000 or (ii) for non-cause tenninations,
a sum "equal to 5% of the capital
improvements made to the facility by [SRB Concession
L for each year or part of a year
remaining in the initial term of this Agreement .
. . up to 100% of the value of said
improvements.', The parties also agreed that, in the event
of a non-cause tennination of the
10 of SO
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concession agreement by the Tow n after

April 30, 2015, the Town would make a
payment to
SRB of a sum "equal to 5% of the capi
tal improvements made to the facility
by (SRB
Concession], for each year or part of a year rem
aining in the initial tenn of this Agreement ... up
to l 00% of the value of said improvements."
38. SRB Concession then entered into a finan

cing arrangement with the lender,
Madison National Bank, pursuant to whic
h Singh obtained a $1.5 million line of cred
it. On the
same day, SRB Concession also entered
into another agreement, the "201 0 TOB
AY Default
Assignment Agreement," pursuant to whic
h it agreed, amongst other things, to assig
n any
termination fees received from the Tow n
under the 2010 TOBAY Amendment to Mad
ison
National Banlc.
39. Finally, Mei executed a letter opining that

the agreements entered into by the
Town in respect of the $1.5 million Madison
National Bank line of credit were duly auth
orized,
binding, and enforceable against the Town.
IV. Unable To Borrow Additional Funds Law

fully, Singh Conspired With Defendants
To Defraud The Town
40. At the same time that the Town entered into

the 2010 TOBAY Amendment, it
also prepared a parallel amendment of
the Woodlands concession agreement
(the "201 0
Woodlands Amendment") that included prov
isions related to a potential $2 million financing
for
improvements at Woodlands. However, Sing
h had not obtained the $2 million fmancing
at the
time, and the amendment was never utilized
to obtain any such financing .
41. Rather, throughout the summer of 2010,
Singh and Mei negotiated with various
lenders in the hope of obtaining an even large
r fina ncin g-of over $3 mil lion -to cover
the costs
of improvements at Woodlands. Those negotiations did not lead to any
new financings,
however.
11 of SO
[FIL ED: NASS AU COUNTY' JERK 06/2 6/20 17
1
NYSCEF DOC.
05:1 8 PMJ INDEX NO. 60613 2/201 7
NO. 2
42. A key obstacle to Singh 's ability to obtain further financ

ing was that lenders
sought more protection for a second loan. Even Madi
son N ationaI Bank refused to enter into
another transaction with Singh absent assurances from
"independent outside counsel" to the
Town that the Town could lawfully support the loan transa
ction and make the bank whole in the
event that Singh defaulted. Other potential funders expre
ssed the same concerns.
43. Faced with these more stringent lender demands, Singh
and Mei hatched a plan:
in return for cash payments and other kickbacks from Singh
, Mei would misrepresent to potential
lenders that the Town was willing to pay even larger
termination fees than bad actually been
approved by the Town Board; meanwhile, Singh 's long-t
ime outside counsel, the law firm of
Hanis Beach and Harris Beach partner William Garry
, would falsely hold themselves out to
potential lenders as outside couns el/or the Town and provid
e whatever comfort was requested by
prospective lenders as if they were duly authorized to repres
ent the Town.
44. Harris Beach is a tristate area law firm that boasts
about being "amo ng the
country's top law firms" and claims to have significant
municipal law experience, including
statewide representation of municipalities and agencies.
For years, Harris Beach attorneys,
including Garry specifically, have represented Singh and
acted as outside counsel to his various
businesses.
45. Singh and Mei reached out to Garry to solicit his partic
ipation in their fraudulent
scheme in early September 2010. Garry immediately agree
d to take part. Specifically, he agreed
to hold Harris Beach out to potential lenders as repres
enting the Town, and to negotiate with
those lenders as ifhe represented the Town, even though
he was in fact Singh 's lawyer and being
compensated exclusively by Singh. Garry also agreed
to provide any opinion letters demanded
by lenders fr~m the Town 's "independent outside counsel"
even though, as municipal law
12 of 50
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NYSCEF DOC. NO. 2
experts, Garry and Harris Bea ch knew that

any such representations were false beca
use, like any
contract, a law firm retention agre eme nt
must be authorized by the Tow n Boa rd to
be binding on
the Tow n and the Tow n Boa rd did not, and
was never asked to, authorize the retention
of Harris
Beach.
46. On September 16, 2010, just days after Harr

is Beach bad agre ed to assist in the
scheme, Mei emailed Garry a letter purportin
g to "appointO" Harris Bea ch to represen
t the Tow n
in connection with Sing h's negotiations with
Madison National Bank. In his letter,
Mei
purported to inform Harris Bea ch that Mad
ison National Ban k "is requiring the Tow
n to secu re
an Opinion of Counsel letter from inde
pendent outside counsel, stati ng that the
Tow n is
authorized to make the nece ssar y ame
ndments [to SRB Cate ring 's existing
concession
agreement]" and to "app oint Harris Bea
ch PLLC as the Tow n's outside coun
sel for this
purpose.''
47. The next day, in an apparent attempt

to conceal the invalid nature of that
purported appointment, Mei countersigned
and returned to Harris Beach, again via
email, a
purported engagement letter (the "Sep temb
er 17 Letter") acknowledging that Harris
Beach acts
as counsel to Sing h but had agreed to
represent the Tow n and provide an opin
ion letter to
Madison National Bank on the Tow n's
behalf "bas ed upon ... the underlying
Concession
Agreement betw een [the Town] and [SRB
Catering]."
48. Days later, on Sept emb er 23, 2010, Singh rewa

rded Mei for the steps Mei had
take n towards implementing their sche me
with an all-expen ses paid business class trip to India.
49. Harris Beach did not bill the Tow n for any
services performed in connection with
the matters set forth in the Sept emb er 17
Letter.
50. Nonetheless, in the months that followed

, Singh, Mei and Garry negotiated with
13 of so
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NYSCEF DOC. NO. 2
RECEIVED NYSCEF: 06/26/ 2017
various lenders in the hope of securing additional funds for

Singh. In all of their
communications with these potential lenders, including on numero
us calls and in multiple
emails, Mei and Garry held themselves out as acting on behalf of the
Town.
51. Ultimately, in May 2011, Singh obtained a new line of credit in an amoun
t of $3 .4
million from Madison National Bank, ostensibly to fund improvements
at Woodlands.
52. Singh' s new borrowing was structured to mirror the (lawfully authori
zed) $1.5
million line of credit from Madison National Ban1c that had been entered
into in June 2010 to
fund improvements at TOBAY. However, the new amendment of
the Woodlands' concession
agreement necessary to facilitate the financing was never presen
ted to the Town Board for
approval. Instead, Mei doctored a copy of the 2010 Woodlands Amen dment
-includ ing by
swapping modified pages into the middle of the docum ent-to change
the tennination fee listed
from $2 million to $3 .4 million. He then misrepresented to a town execut
ive that the agreement
needed to be "re-signed" with a current date due to ministerial change
s required by Madison
National Bank, concealing that the tennin ation fees were being almost
doubled. Through this
subterfuge, Mei and Singh fraudulently procured an amendment that
had never been authorized
by any Town Board resolution, thereby making that amendment invalid and
illegal.
53. Nonetheless, both Mei and Harris Beach issued legal opinions
to Madison
National Bank stating that the amendment was duly authorized, binding
, and enforceable against
the Town.
V. Emboldened, Mei And Singh Continue the Conspiracy
54. Not satisfied with the financing they had already obtained, and embold
ened by
their ability to obtain millions of dollars from Madison National Bank
through fraud, Mei and
Singh sought out new participants in their scheme. Phoenix soon stepped
in.
A. Defendants Conspire In Purporting To Obligate The Town To Guaran
tee A $7.8
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INDEX NO. 60613 2/201 7
NYSCEF DOC. NO. 2
Million Loan From Phoenix To SRB Catering
55. Throughout the summ er of 2011, Mei and Singh actively

engaged in negotiations
with multiple potential lenders in an attempt to secure yet
more illegal funds for Singh with
Harris Beach continuing to provide a fig leaf for their schem
e. They soon focused their attention
on NDH Capital Corporation ("NO H'' and, with Phoen
ix, the "Lender Parties"), an investment
broker working on behal f of Phoenix.
56. Phoenix is a sophisticated market participant with hundr

eds of millions of dollars
of assets under management that participates in dozens of
complex financial transactions a year.
Phoenix works regularly with NOH to identify new inves
tment opportunities. In the event that
NDH identifies an investment of interest to Phoenix, Phoen
ix and NDH together negotiate the
transaction documents with the borrower; typically, in return
for a transaction fee, NDH acts as
the transaction's nominal lender and then assigns the loan
at issue to Phoenix immediately after
the transaction closing.
57. By the fall of 2011, Phoenix had agreed to lend Singh

more than $7.8 million,
inclusive of interest at a rate of 8.629%. In return, howe
ver, Phoenix demanded that the Town
be obligated to repay Singh 's deb~ in full in the event that
Singh defaulted.
58. As sophisticated market participants advised by couns
el for both NDH and
Phoenix, the Lender Parties knew that the New York State
Constitution prohibits the Town from
guaranteeing SRB 's debt. Indeed, they discussed this clear constitutional rule
during a
teleconference with Harris Beach on October 27, 201
I, during which Harris Beach lawyers
reiterated that "a guarantee by a municipality for the debt
of a private entity ... would violate the
New York State Constitution." Phoenix nonetheless dema
nded that Mei purport to provide "the
absolute, unconditional obligation of the Town" to repay
Singh 's debt in the event of a default by
SRB so that risk of a default by Singh was transferred from
Phoenix to the innocent taxpayers of
15 of SO
(FILE D: NASSAU COUNTY ~ERK 06/2 6/20 17 05:1 8 PM] INDEX NO. 606132 /2017
NYSCEF DOC. NO. 2
Oyster Bay. Apparently determined to please Singh -and thereby

secure further bribes for
himsel f:-Mei purported to oblige.
59. On September 12, 2011, Mei informed NDH that he had spoken to Garry
and "we
are all in agreement that the Town would become contractually obligat
ed to make default
payments to [Phoenix] ...."
60. On November 18, 2011, NDH entered into a negotiable promissory

note (the
"Woodlands Note") with SRB Catering pursuant to which it promis
ed to lend SRB Catering
$7,843,138.08 (such loan, the "Woodlands Loan"). This was well in
excess of the value of the
existing improvements that had been completed by Singh at the Woodl
ands. It was also well in
excess of the $3.25 million in additional improvements that SRB
Catering was obligated to
perform at Woodlands. Moreover, the promissory note did not require
that Singh spend even a
dollar of the loan proceeds on improvements to the Woodlands facility
. There was thus little
pretense that Singh was intending to use the funds for improvements at
the Woodlands.
61. That same day, Mei and Singh purported to amend the Woodlands
Concession
Agreement (such amendment, the "Unauthorized Woodlands Amendment")
to acknowledge the
Woodlands Loan and to ostensibly obligate the Town to guarantee the
entire amount due to NDH
in the event of a default by SRB Catering or a termination of the conces
sion by the Town prior to
December 31, 2025, irrespective of whether any of the loan proceeds
had been used to make
capital improvements to the Woodlands facilities.
62. Specifically, in the Unauthorized Woodlands Amendment, Defendants

purported
to obligate the Town to make a "termination payment" to PHL in an
amount equal to the entire
outstanding balance of the Note, plus accrued interest, and "all other amoun
ts due and to become
due under the Loan Documents ...." in the event of an "Event of Defaul
t" by SRB Catering,
16 of so
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NYSCEF DOC. NO. 2
PM! INDEX NO. 606132 /2017
irrespective of whether any amounts had been spent on improvements

at the Woodlands facility.
The definition of "Event of Default" in the Woodlands Conces
sion Agreement was also
ostensibly revised to include "receip t by the Town on written notice
... from the Lender of the
occurrence of a default or event of default" under either the Woodlands
Note or the Term Loan,
Pledge and Security Agreement, dated as of October 27, 2011, betwee
n SRB Catering and NDH
(the "Woodlands Loan Agreement").
63. Although the nomenclature used was similar, the "termination

payment"
envisaged by the Unauthorized Woodlands Amendment was, therefo
re, very different from the
"termination payment" required by the authorized 2010 TOBAY
Amendment. Whereas the
2010 TOBA Y Amendment obligated the Town to make a compa
ratively modest tennination
payment that would be materially less than the value of existing improv
ements made by Singh at
the TOBA Y facilities, the Unauthorized Woodlands Amendment contem
plated that the Town
would make PHL whole by repaying the entire amount of the Woodl
ands Loan, which was
substantially in excess of the value of existing improvements.
64. Mei and Harris Beach also purported to obligate the Town to waive all
defenses to
payment of the ~'tennination payment" to SRB Catering. Extraordinari
ly, they purported to agree
that the Town would not raise any legal or equitable defenses whatso
ever to payment of the full
outstanding amount of the loan, including any counterclaims or claims
for set off or recoupment
from SRB Catering, or even raise "any circumstances whatsoever which
might constitute a legal
or equitable discharge or defense" of the Town.
65. Finally, Mei and Singh also purported to enter into an assignment agreem
ent (the
"Wood lands Assignment Agreement") pursuant to which SRB Caterin
g purported to assign any
payments received from the Town under the Unauthorized Woodlands
Amendment to NDH.
17 of so
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NYSCEF DOC. NO. 2
66. By letter addressed to NDH, dated November 16, 2011 (the

"2011 Harris Beach
Opinion Letter"), Harris Beach claimed to have been "retained
to act as counsel to the [Town]"
and falsely represented that the Unauthorized Woodlands Amen
dment was "duly authorized by
all necessary action of [the Town ]" and "duly executed and delive
red by [the Town]."2
67. Similarly, Mei also executed a letter, dated Novem ber 18, 2011
(the "2011 Mei
Opinion Letter"), in which he purported to opine that "paym ents
to be made by [the Town] under
the [Unauthorized Woodlands Amendment] are not subjec
t to any conditions precedent to
funding and are not subject to any off-sets, reductions or
defenses to satisfy [the Town 's]
obligations. " 3
68. As one of two officers of SRB Catering, Ruby Singh approved

the SRB Catering
board resolution approving the transaction. Ruby Singh also
issued a "Certificate of Secretary"
certifying -as to the accuracy of certain documents, including
the SRB Catering by-laws and
board resolutions, provided to NDH in connection with the transa
ction closing.
69. Despite being a sophisticated party represented by counsel
and advised by an
independent loan broker, Phoenix did not require that even a single
dollar of the loan procee ds be
used at the concession facilities, did not request any explanation
from Singh as to why SRB was
seeking such a large sum of money, did not ask for or receive
any construction plans or budgets
from Singh indicating which improvements to the concession
facilities were to be made with the
loan proceeds, and paid the entire amount of the loan out to
Singh in a lump sum rather than
requiring that periodic payments be made upon SRB Cateri
ng meeting fixed construction
2
Mei returned a second engagement letter (the "October 19 Letter")
to Harris Beach on October 19, 2011. In it,
Mei purported to infonn Harris Beach that NOH required the Town "to
secure an Opinion of Counsel letter from
independent outside counsel" and to appoint Harris Beach to play
that role. This purported retention was not
authorized by a Town Board resolution, and Harris Beach did not bill
the Town for any services perfonned under
the October 19 Letter.
3
Mei's letter also stated that he had "examined ... certain resolutions"
of the Town Board in connection with the
Woodlands Loan, including Resolutions No. 638-2000, 313-2005, 889 4
2008, and, significantly, 605 2010.
4
18 of so
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NYSCEF DOC. NO. 2
milestones, as is customary in the construction context.
70. Moreover, as all of the transaction parties knew, and consi

stent with the goals of
the conspiracy, the Unauthorized Woodlands Amen
dment was neither considered by the Town
Board nor authorized by a Town Board resolution as
would be required to create a binding
obligation on the Town. The signatures on the agreement
purporting to be those of then Town
Attorney Leonard Genova are either forgeries or were obtai
ned by trickery or fraud.
71. Thus, the Woodlands Loan transaction had all of the
hallmarks of a fraudulent
scheme: the loan was for millions of dollars more than
the value of the improvements that Singh
was obligated by contract to perfonn at TOBAY; no
other Town employees participated in
arranging or considering the transaction; no Town Board
resolution was prepared or presented to
the Town Board; there was no Town Board vote to appro
ve the deal; the transaction documents
purported to obligate the Town to guarantee millions
of dollars of loans even though all of the
parties lmew that such guarantees were prohibited by the
State Constitution; loan proceeds were
paid directly to SRB Catering in a single lump sum paym
ent at closing; and Mei purported to
waive all of the Town's legal and equitable defenses to
making a guarantee payment and require
the Town to pay Phoenix millions of dollars even if
the Town received no benefit whatsoever
because SRB made no improvements to the Town's facili
ties. Moreover, the interest rate charged
by Phoenix on the Woodlands Loan s-ov er 8.6%
-was multiples of what the Town paid on its
own debt, further evidencing that the parties under
stood the Woodlands Loan was not a
legitimate financing legally guaranteed by the Town, but
rather a fraudulent transaction that the
Town was never lawfully bound to support.
72. Nonetheless, shortly after entering into the Woodlands

Note, NDH disbursed the
entire amount of the Woodlands Loan, a total of $7,84
3,138.08, to SRB Catering in one lump
19 of 50
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sum payment. As agreed prior to closing, NDH then sold

and assigned the loan to PHL.
73. Singh did not use the loan proceeds to make impro
vements at Woodlands.
Instead, he paid Mei and Harris Beach for their participatio
n in the scheme and diverted the cash
received from NDH and/or PHL to his and Ruby Singh ' s
other business and/or personal affairs.
74. Mei, in particular, was rewarded handsomely for his misco
nduct. Approximately
one week after entering into the Unauthorized Woodland
Amendment, Singh gave Mei $25,000
in five checks, each in the amount of $5,000 and made out
to "cash."4
75. Harris Beach was also rewarded for its cooperation with lucrat
ive new business
from Singh and his businesses. While Garry had previously
acted as transaction counsel to
Singh and his businesses, shortly after the parties closed
on the Woodlands Loan Singh also
began sending his litigation business Harris Beac h's way.
On February 6, 2012, for example,
Garry appeared on behal f of various Singh business,
including both SRB Catering and SRB
Concession, in a new matter filed against those entitie
s in the Eastern District of New York
captioned Lamb et al v. Singh Hospitality Group, Inc. et
al (Case No. 11-cv-06060). Garry was
soon also retained to work on a second new matter:
within weeks, he filed an unrelated
complaint in the Eastern District of New York on
behal f of two different Singh-owned
businesses in a matter captioned H&R Convention and
Catering Corp. and Quinn Restaurant
Corporation et al v. Somerstein et al (Case No. 12-cv-01425).
Harris Beach was paid significant
fees for its work on Singh 's behal f in each of these new matte
rs.
B. Defendants Conspire in Pumorting to Obligate the Town
to Guarantee a $12
Million Loan to SRB Concession
4
Details of Singh's payments to Mei are set forth in a thirteen-coun
t federal criminal indictment against Singh (the
"Singh Indictment") filed on September 8, 2015 in the Eastern
District of New York, Case No. 15-cr-450
(E.D.N.Y.), in connection with the acts and omissions described
in this Complaint. Criminal charges have a]so been
filed against Mei in a related action, captioned United States
v. Frederick Mei, Case No. 15-cr-429, but the
indictment in that case is sealed.
20 of SO
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76. Almost immediately following the execution of the

Unauthorized Woodlands
Amendment, the parties entered into negotiations over a
secon d Phoenix loan to Singh.
77. In June 2012, under the pretext of needing to financ
e $2.5 million of
contractually-required capital improvements to the
TOBA Y facilities, Singh and SRB
Concession obtained a second loan from NDH , this
time with a face amount, inclusive of
interest, of $12,273,748.80 and an interest rate of 8.88%
(the "TOB AY Loan").
78. On June 19, 2012, concurrently with the transaction docum
ents entered into to
effectuate the TOBAY Loan, including a promissory note
with NOH, dated June 22, 2012 (the
"TOB AY Note''), Singh and Mei purported to amend the
TOBA Y Concession Agreement (such
amendment, the "Unauthorized TOBA Y Amendment"
and, with the Unauthorized Woodlands
Amendment, the "Unauthorized SRB Amendments").
79. The Unauthorized TOBA Y Amendment ostensibly ackno

wledged the TOBA Y
Loan and obligated the Town to guarantee all of the amou
nts due and payable to NOH/Phoenix
Life under it in the event of a default by SRB Concession
or a tennination of the concession by
the Town prior to March 15, 2029, irrespective of wheth
er or not any of the loan proceeds had
been used to make capital improvements to the TOBA Y
facilities. As before, the definition of
"Event of Default" was revis ed-th is time to include not
only "receipt by the Town of written
notice ... from the Lender of the occurrence of a default
or event of default" under the TOBA Y
Note or the Term Loan, Pledge and Security Agreement,
dated as of June 22, 2012 between
NDH and SRB Concession (the "TOB AY Loan Agreement"
), but also an event of default under
either the Woodlands Note or the Woodlands-Loan Agree
ment.
80. Mei and Harris Beach also purported to obligate the Town
to amend the TOBA Y
Concession Agreement to waive all defenses to payment
of the "termination payment" following
21 of so
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"'::7:.-0-:0:""'::5::--:--==1--==a~p~M}
INDEX NO. 6061 32/20 17
NYSCEF DOC. NO. 2
an event of default. . Specifically, they once

again purported to agree that the Tow n's
"obligation" to make the termination paym ent was
not subject to any condition precedent or any
legal or equitable defense to pay~ ent, including any
defense of set off or recoupment.
81. Finally, Mei and Singh again purported to enter
into an assignment agree ment
(the "TOB AY Assignment Agreement" and, with
the Woodlands Assignment Agreement, the
"Una uthor ized SRB ~ssig nmen t Agre emen ts") in
which SRB Concession purported to assig n
any payments received from the Town under the Unau
thorized TOB A Y Amendment to NDH .
82. In a letter addressed to NOH , dated June 20, 2012 (the
"201 2 Ham s Beac h
Opinion Letter" and, with the 2011 Harris Beac h
Opinion Letter, the "Harris Beac h Opinion
Letters"), Harris Beac h again claim ed to have been
"reta ined to act as coW1Sel to the [Tow n]"
and opined that the Unauthorized TOBAY Amendment
was "duly authorized by all necessary
action of [the Town]" was "duly executed and deliv
ered by [the Town]." 5
83. Mei also entered into a letter addressed to NOH, dated

June 22, 2012 (the "2012
Mei Opin ion Letter" and, with the 2011 Mei Opin
ion Letter, the "Mei Opinion Letters"),
purporting to opine that "[p]ayments to be made by [the
TO\,vn ) under the [Unauthorized TOB AY
Amendment] are not subject to any conditions prece
dent to funding and are not subje ct to any
off-sets, reductions or defenses to satisfy [the Town
's] obligations.''6
84. As one of two officers of SRB Concession, Ruby Singh

again approved the board
resolution approving the transaction. She also issue
d a "Certificate of Secretary" certifying as to
the accuracy of certain documents, including the SRB
Concession by-laws and board resolutions,
.s Mei returned a third engagement letter (the ..May

17 Letter") to Harris Beach on May 17, 2012. This time,
purported to retain Harris Beach to act "as the Town's outside counsel in reference to the Mei
Concession] ... to obtain a loan from (NDH]." This purpo application by (SRB
rted retention was not authorized by a Town Board
resolution either, and Harris Beach did not bill the Town for
6 any services perfonned under the May 17 Letter.
Mei's letter also stated that he had "examined ... certain
resolutions" of the Town Board in connection with the
TOBAY Loan, including Resolutions No. 312~2005 and 887-20
08.
22 of so
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INDEX NO. 606132 /2017
NYSCEF DOC. NO. 2
provided to NDH in connection with the transaction closing.
85. As all of the transaction parties knew, and consistent with the goals of the
conspiracy, the Unauthorized TOBA Y Amendment was neither considered by the

Town Board
nor authorized by a Town Board resolution as would be required to create a binding
obligation
on the Town. The signatures on the agreement purporting to be those of Town Attorne
y Leonard
Genova are either forgeries or were obtained by trickery or fraud.
86. Thus, the TOBAY Loan transaction had all of the same hallmarks of a fraudulent
scheme as the Woodlands Loan transaction. Once again: the loan was for many
millions of
dollars more than the value of the improvements that Singh was obligated to perfonn
; no other
Town employees participated in arranging or considering the transaction; the Town
Board did
not consider or approve the transaction; the contract purported to obligate the Town
to guarantee
millions of dollars of loans even though all of the parties knew that such guarant
ees were
prohibited by the State Constitution; loan proceeds were paid directly to SRB Conces
sion in a
single lump sum payment at closing; and Mei purported to waive all of the Town's
legal and
equitable defenses to making that guarantee payment and to require the Town
to pay Phoenix
millions of dollars, even if the Town received no benefit whatsoever because SRB
Concession
made no improvements to the Town's TOBAY facilities. And, again, the TOBAY Loan
bore an
interest rate-o f 8.88% -that was multiples of what the Town paid on its own
financings and
further evidenced that the loan was not a legitimate financing legally guaranteed
by the Town,
but rather a fraudulent transaction that the Town was never lawfully bound to support.
87. Shortly after entering into the TOBAY Note, NDH disbursed the entire amount of
the TOBAY Loan, a total of $12,273,748.80, to SRB Concession one lump sum
payment. As
agreed prior to closing, NDH then sold and assigned the loan to Phoenix Life.
23 of so
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8 PM) --
INDEX NO. 60613 2/2017
NYSCEF DOC. NO. 2
88. Singh did not use the loan proceeds to make any improvemen
ts at TOBAY.
Instead, he paid Mei and Harris Beach for their participation in
the scheme and diverted the cash
to his and Ruby Singh 's other business and/or personal affairs
.
89. Approximately one week after entering into the Unaut
horized TOBAY
Amendment, Singh gave Mei anothe r $25,000 in five checks,
each in the amount of $5,000 and
made out to "cash." The following month, Singh paid for Mei
and a relative of Mei's to take
another all-expenses-paid luxury vacation to South Korea This
was not the only trip that Singh
paid for: Singh had paid for Mei to take ten day, all-expenses
paid trips to India in 2010 and
2012. And, starting in or about September 2012, and contin
uing until details of Defendants'
scheme becam e public in February 2015, Singh made monthly
payments to Mei to pay for Mei's
lease of a BMW car; the total value of the BMW lease was approx
imately $36,000.
90. Harris Beach was also once again rewarded with new litigation
business. On May
31, 2012, whlle ostensibly in the throes of negotiations over
the TOBAY concession agreement
amendment on behalf of the Town, Garry appeared on behalf
of Singh and Singh Hospitality
Group in an ERISA matter captioned Valdez et al v. Somer
stein Caterers of Lawrence, Inc.
Pension Plan et al (Case No. 12-cv-01224). He also appeared on
behalf of Quinn Restaurant
Corporation in a different matter, captioned Pension Benefi
t Guaranty Corporation v. Quinn
Restaurant Corporation (Case No. 12-cv-02881), on June 14, 2012.
Harris Beach was paid
significant fees for its work on Singh's behalf in each of these
new matters.
C. Singh and Mei Conspire to Pmport to Obligate the Town to
Guarantee a $ 1.8
Million Loan to HVS
91. In 2012, the Town awarded a third Singh business, HVS

Tappen Beach, a
concession to provide food and beverage services at the
Town 's Harry Tappen Beach at
Glenwood Landing ("Tappen Beach").
24 of so
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INDEX NO. 606132 /2017
NYSCEF DOC. NO. 2
92. Like the duly authorized Woodlands and TOBA Y contracts, the
concession
agreement between the Town and HVS, dated July 16, 2013 (the "2013
Tappen Agreement"),
authorized HVS to provide food and beverage services at Tappen Beach
for a twenty-five year
term commencing on July 1, 2013, in return for SRB paying the Town
a monthly.concession fee.
HVS also agreed to make over $1 million in improvements to the Tappen
Beach facilities.
93.. The 2013 Tappe n Agreement was duly authorized by Town Board Resolu
tion No.
1064-2012, adopted by the Town Board on December 18, 2012.
94. Within months of entering into the 20 I 3 Tappen Agreement, Mei and
Singh were
conspiring to obtain additional funding for Singh using that contract
as a hook. Starting in 2013,
they began negotiations over a proposed loan with third-party loan aJ.Tang
er Bridge Funding. By
July 2014, Bridge Funding had identified a lender, Atalaya Asset
Income Fund II LP
("Atalaya"), who agreed to make a $1.8 million loan (the "Tappe n Beach
Loan") to HVS.
95. This time, however, Mei and Singh did not purport to amend the authori
zed 2013
Tappen Agreement. Instead, on or around July 16, 2014 they fabrica
ted and puzported to enter
into an entirely new concession agreement (the "Unauthorized Tappen
Agreem ent" and, with the
Unauthorized Woodlands Amendment and Unauthorized TOBA Y Amendment, the
"Unauthorized Agreements") that did not even acknowledge the existen
ce of the 2013 Tappen
Agreement.
96. The Unauthorized Tappen Agreement named Atalaya as the lender

entitled to a
termination payment equal to the unpaid balance of the Tappen Beach
Loan in the event of a
tennination of the agreement by the Town for any reason prior to Decem
ber 31, 2037, including
following an Event of Default. "Event of Default" was defined to include
:'receipt by the Town
of written notice ... from the LEND ER of the occurrence of a default
or event of default, beyond
25 of SO
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INDEX NO. 60613 2/2017

any applicable period for grace and cure" under any of the
Tappen Beach Loan agreements,
including the Promissory Note dated July 11, 2014 (the "Tappen
Beach Note") and "any other
loan documents executed by [HVS] and/or its guarantor(s) collec
tively with the [Tappen Beach]
Note and other financing documents ...." 7
97. Once again, Mei and Singh purported to obligate the Town to waive
any defenses
to payment of the contemplated termination payment. Specifically,
the Unauthorized Tappen
Agreement provides that the Town's obligation to niake a termin
ation payment would not be
subject to any conditions precedent or any legal or equitable defens
es, including the defense of
set off, counterclaim or recoupment.
98. As all of the transaction parties knew, and consistent with the
goals of the
conspiracy, the Unauthorized Tappen Agreement was neither consid
ered by the Town Board nor
authorized by a Town Board resolution as would be required to create
a binding obligation on the
Town. The signatures on the agreement purporting to be those
of Parks Commissioner Frank
Nocerino and Town Supervisor John Venditto are either forgeries
or were obtained by trickery or
fraud.
VI. Subsequent Authorized Amendments To The Woodlands And

TOBAY Concession
Agreements Make No Reference To The Unauthorized SRB Amen
dments
99. In 2014, determined to make the TOBAY and Woodlands conce
ssions successful
facilities for the public to enjoy -and, unaware of Mei's and Singh
's fraudulent scheme to obtain
loans for Singh and purport to obligate the Town to guarantee those
loans because Singh and Mei
had concealed the existence of the Unauthorized SRB Amendment
s from the Town -the Town
entered into lawful amendments to the TOBAY and Woodlands conces
sion agreements.
100. On April 8, 2014, the Town entered into an additional amend
ment to the
7
Singh and Ruby Singh also entered into a personal "Guaranty of Paymen
t" agreement, dated July 11, 2014,
pursuant to which they personally guaranteed HVS's obligations under
the Tappen Beach Note.
26 of SO
l~F~I~L=En=---:~N~:A~S~S~A~IJ~C~O~UNT="""'!'!!y~~------ --~_,,. .......,_ ."""'"' "'"--,"" """""-~ ~
...1ERlC 06/26 /2017 05: 18 PM1 INDEX NO. 606132 /2017
NYSCEF DOC. NO. 2
Woodlands concession agreement (the "2014 Woodlands Amendment" and,

with the 2000
Woodlands Agreement, the 2005 Woodlands Amendment and the 2008 Woodla
nds Amendment,
the ''Authorized Woodlands Agreements") that stated that SRB Catering had
completed $8 .2
million in improv ements -which amount was based upon a supporting memora
ndum provided
to the Town Board by Mei-an d agreed to extend the term of the Woodlands
concession for a
further 20 years. In return, SRB Catering agreed to make an additional $3.9 million
in capital
improvements to the facilities for a total in excess of $12,100,000 in improvements.
101. The 2014 Woodlands Amendment was authorized by Town Board Resolution No.
253-2014, adopted by the Town Board on April 8, 2014.
102. While the 2014 Woodlands Amendment lists each of the Town Board resolutions
relating to the Authorized Woodlands Agreem ents-i.e . Resolution Nos. 638-200

0, 313-2005,
and 889-20 08-no mention is made of the 2010 resolution that Mei claimed
authorized the
Unauthorized Woodlands Amendment.
103. Simultaneously with the 2014 Woodlands Amendment, the Town also entered
into an amendment to the TOBAY Concession Agreement (such amendment, the

"2014 TOBA Y
Amendment" and, with the 2005 TOBA y, Agreement, the 2008 TOBA Y Amendm
ent and the
2010 TOBAY Amendment, the "Authorized TOBA Y Agreements"). The 2014 TOBAY
Amendment acknowledged that SRB Concession had completed $3 .5 million in
improvements at
TOBAY-aga in supported by a memorandum to the Town Board from Mei-an
d agreed to
extend the concession agreement for a further 20 years. In return, SRB Concess
ion agreed to
make an additional $4.1 million in capital improvements to the facilities for a total
of $7,600,000
in improvements.
104. The 2014 TOBAY Amendment was authorized by Town Board Resolution No.
27 of 50
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PM.1 ~ INDEX NO. 60613 2/2017
NYSCEF DOC. NO. 2
254-2014, adopted by the Town Board on April 8, 2014.
105. While the 2014 TOBAY Amendment lists both of the Town Board
resolutions
relating to authorized amendments to the Authorized TOBA Y Agree
ment-i. e. Resolution Nos.
312-2005 and 887-2 008-n o mention is made of the 2010
resolution that Mei claimed
author ized the Unaut horize d TOBA Y Amen dment .
VII. Singh Defaults On His Town Concession Agreements And

Lenders Sue The Town
Demanding Payment On The Town "Guarantees" Of Singh
's Debt
106. Mei and Singh concealed the existence of the Unauthorized Agreements
and other
docum ents relatin g to the Wood lands Loan, the TOBA Y Loan,
and the Tappe n Beach Loan from
the Town and the Town did not learn of those purpor ted agreem
ents until February 2015 (with
respec t to the Woodlands Loan and the TOBAY Loan) and
in or about December 2015 (with
respect to the Tappen Beach Loan) when Town employees investigating
the events giving rise to
the U.S. Attorney's investigation that resulted in Singh's indictm
ent discovered copies of the
agreements and related documents in Mei's office and emails.
107. On March 23, 2015, the Town served notices of default on SRB
Catering and
SRB Concession advising Singh that those entities were in default
of their obligations under the
2000 Woodlands Agreement and 2005 TOBAY Agreement, respec
tively.
108. The Town followed-up on those notices in materially identical letters
, dated June
16, 2015, providing fonnal notice to SRB that the Unauthorize
d SRB Amendments and
Unauthorized SRB Assignment Agreements were null and void.
109. By letter dated June 16, 2015, the Town also provided formal written
notice to
Harris Beach that, as there was no Town Board resolution author
izing the retention of Harris
Beach, "[a]ny letters, notices, or other acts performed by Harris
Beach in furtherance of its
asserted representation of the Town created no responsibilities or obliga
tions on the Town."
28 of so
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.~= -~~ Document 80 Filed 08/28/17 Page 35 of 255 PageID #: 1676
AU ~~~
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6/20 17 05:1 8 PM, INDEX NO. 60613 2/201 7
NYSCEF DOC. NO. 2
110. On June 16, 2015, the Town also informed NDH that the
Unauthorized SRB
Assignment Agreements are null and void "because, amon
g other reasons, they each purport to
make the Town a guarantor of the Concessionaire's loan,
which violates Article VIII, 1 of the
New York State Constitution, and neither was authorized.
by a Town Board resolution, as
required under New York State Town Law 64(6)."
111. On September 16, 201 S, outside counsel to the Town again

provided written
notice to SRB Concession and SRB Catering that they were
in default of their obligations under
the 2005 TOBAY Agreement and 2000 Woodlands Agreement,
respectively. On September 17,
2015, outside counsel to the Town provided written notice
to HVS that it was in default of its
obligations under the 2013 Tappen Beach Agreement.
112. On May 12, 2016, outside counsel to the Town provided

written notice to HVS
that it had failed to cure its default under the 2013 Tappe
n Beach Agreement and the Town was
therefore terminating that contract. On September 2016,
the Town's outside counsel also sent
written notice of tennination of the 2000 Woodlands Agree
ment and 2005 TOBAY Agreement
to SRB.
113. As of the termination of their respective concession agreem

ents, SRB and HVS
were also delinquent on payments due to the Town under those
contracts: SRB Concession was
at least $60,000 in arrears on the monthly payments requir
ed under the Authorized TOBAY
Agreements; SRB Catering was at least $190,000 in arrear
s on the monthly payments required
under the Authorized Woodlands Agreements; and HVS was
at least $55,000 in arrears on the
monthly payments required under the 2013 Tappen Beach Agree
ment.
A. The Nassau District Attorney Investigation
114. On August 25, 2015, the Nassau County District Attorney

requested information
from the Town concerning the Unauthorized Agreements.
29 of SO
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INDEX NO. 606132 /2017

NYSCEF DOC. NO. 2
115. The Town has provided the requested documents and is continuing
to provid e
documents in response to these inquiries, and has incurred substan
tial legal fees and other
expenses in responding to the District Attorn ey's requests.
B. The SEC Investigation

116. In a subpoe na dated Octobe r 20, 2015, the United States Securities
and Exchange
Commission ("SEC") requested information from the Town concer
ning Singh, Mei and the
Unauthorized Agreements, as well as certain of the Town' s public disclos
ures.
117. The Town has provided the requested documents and is continuing
to provide
documents in response to these inquiries, and has incurred substan
tial legal fees and other
expenses in responding to the SEC's requests.
C. Improp er Claims and The Civil Litigation
118. Atalay a filed suit against the Town and other defendants, includi
ng Singh and
HVS, on January 26, 2016 alleging breach of contract and unjust enrichm
ent claims against the
Town. Atalay a's claims arise out of the Tappen Beach Loan and
the fraudulent and improp er
acts and omissions by Mei and Singh in connection with the Tappen
Beach Loan. 8 The Town' s
motion to dismiss Atalay a's claims was derued and, while the Town
has appealed that decision to
the Appellate Division of the New York State Suprem e Court, Second
Judicial Department, it
faces the prospect of expensive and time-consuming fact and expert
discovery in that matter
while its appeal is pending.
119. On February 26, 2016, Phoenix sought to bring its improper scheme
to fruition by
delivering separate letters to the Town demanding lump sum payme
nts from the Town on the
amounts that Phoenix Life and PHL claimed were outstanding under
the TOBA Y Loan and
8
Atalaya separately brought claims against Singh. HVS and other defendants
associated with Singh. A default
judgement for the full amount of damages demanded, plus interest and attorney
s' fees, was entered against HVS,
Singh, and the other Singh defendants on December 2, 2016.
30 of so
I_F_I.....L""""E,__D_:_____
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P!fl, ~ INDEX NO. 60613 2/2017
NYSCEF DOC. NO. 2
Woodlands Loan, respectively. Specifically, Phoenix Life's letter

(the "Improper Phoenix Life
Claim") demanded that the Town make it whole by paying
it a lump sum payment of
$9,12 7,891 .45-th e full amount that it asserted was due on TOBA
Y Loan, including default and
accrued intere st-wit hin sixty days. PHL' s letter (the "Improper PHL Claim") similarly
demanded that the Town pay it a lump sum payment of $5,40
0,252 .77-th e full amount that it
asserted was due on Woodlands Loan, including default and accrue
d intere st-wit hin sixty days.
120. When the Town refused to make payments on the Improper Phoen
ix Life Claim
and Improper PHL Claim, in a final attempt to bring its improper
plan to fruition and compel the
Town to make it whole, Phoenix Life and PHL filed separate lawsu
its against the Town.
121. Phoenix Life filed suit against the Town on July 19, 2016 in the
Supreme Court of
the State of New York; it filed an Amended Complaint on July
27, 2016 and a Second Amended
Complaint on August 30, 2016. The Second Amended Complaint
asserted twelve claims against
the Town, including for breach of contract, unjust enrichment,
innocent misrepresentation,
negligent misrepresentation and fraud. The Town's motion to dismis
s Phoenix Life's claims was
denied and, while the Town has filed a notice of appeal of that decisi
on to the Appellate Division
of the New York State Supreme Court, Second Judicial Depar
tment, it faces the prospect of
expensive and time-consuming fact and expert discovery while
its appeal is pending in that
matter as well.
122. Similarly, PHL filed suit against the Town on July 19, 2016 in the
Eastern District
of New York; an Amended Complaint was filed on July 27, 2016.
PHL's Amended Complaint
asserted analogous claims to those alleged by Phoenix Life and
sought to force the Town to
make it whole after SRB Catering's inevitable default on the Wood
lands Loan. In an Opinion
and Order dated May 30, 2017, the court granted the Town's motio
n to dismiss and dismissed all
31 of so
r-F~I~L=E_,D_:. . . N~A-S~S~
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____R_IC_0_6_/._2,....6...../....,,2.....,.0_l.,...7_0__
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INDEX NO. 606132 /2017
NYSCEF DOC. NO. 2
twelve of PHL's claims with prejudice. Dismissing PHL's breach

of contrac t claims, the court
held that the Unauthorized Woodl ands Agreement was not enforceable
against the Town becaus e
it had not been approv ed by the Town in accordance with the require
ments of New York Town
Law, including because no Town Board resolution authorized the
agreement. PHL's unjust
enrichment claim was dismis sed because PHL could allege no
facts "from which it may
reasonably be inferred that the Town actually received any specific and direct
benefit at [PHL's]
expense." PHL' s various tort claims were also dismissed; in dismis
sing those claims, the court
once again empha sized that parties contracting with municipalities
are charged with knowle dge
of the statutory framew ork within which municipalities operat
e-so PHL could not claim
ignorance of the fact that no Town employee was authorized to execute
an agreement with SRB
absent Town B~ard approval.
123. The Town has already incurred, and faces the prospect of continu
ing to incur,
substantial legal fees and other expenses defending itself agains t the Atalay a
and Phoeni x claims.
CAUSES OF ACTION
FIRST CAUSE OF ACTION

AGAINST MEI
(Faithless Servant)
124. The Town repeats and realleges the foregoing allegations as though
they were
fully set forth here.
125. Mei was a Deputy Town Attorney and Town employee and receive
d bi-monthly
wages from the Town from 2010 to 2015.
126. As a Town employee and Deputy Town Attorney Mei owed fiduciary and
other
duties to the Town.
127. Mei acted disloyally and adversely to the Town, including by (i)
devising and
participating in the scheme to fraudulently obtain loans for Singh, (ii) accepti
ng approximately
32 of so
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INDEX NO. 606132 /2017
NYSCEF DOC. NO. 2
$50,00 0 in cash bribes and other kickbacks, includi ng holiday travel

expens es and car payme nts,
from Singh, (iii) partici pating in the scheme to defraud the Town
by falsely holding himsel f out
as acting in his official capaci ty as a Deputy Town Attorn ey and
representing the Town in
negotiations with potential third-p arty lenders, (iv) purpor ting to
retain Garry and Harris Beach
in order to secure their partici pation in the fraudu lent scheme, and
(v) purpor ting to obligate the
Town to guaran tee million s of dollars in loans obtaine d by Singh'
s busine ss interests, includi ng
SRB Catering, SRB Concession, and HVS.
128. Mei's acts, includi ng in accepti ng Singh' s bribes and purpor ting
to obligat e the
Town to make millions of dollars in payme nts to Phoeni x and
Atalay a, were intenti onal,
deliberate, and criminal.
129. The Town paid Mei an annual base salary of $108,0 38.00 in 2010,
$108,288.00 in
2011, 2012, and 2013, and $117,2 88.00 in both 2014 and 2015.
130. The Town is entitled to damag es in the amoun t of Mei's entire

salary for the
period during which he was acting disloyally, and to punitive damag
es.
SECOND CAUSE OF ACTION

AGAINST MEI
(Breach of Fiduciary Duty)
they were
132. As a Deputy Town Attorn ey and a senior Town employ ee, Mei
owed fiducia ry
duties to the Town.
133. Mei breach ed those fiduciary duties when he (i) devise d and particip
ated in a
scheme to fraudulently obtain loans for Singh, (ii) accepted approx
imately $50,00 0 in cash
bribes and other kickbacks, includi ng luxury holiday travel expens
es and car payments, from
Singh, (iii) participated in the scheme to defraud the Town

by holdin g himsel f out as
33 of SO
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INDEX NO. 606132 /2017
NYSCEF DOC. NO. 2
representing the Town in negotiations with potential third-party lenders, (iv) purport
ed to retain
Garry and Harris Beach in order to secure their participation in the fraudulent scheme
, and (v)
I
purported to obligate the Town to guarantee millions of dollars in loans obtained
by Singh's
business interests, including SRB Catering, SRB Concession, and HVS.
134. As a direct and proximate result of Mei's breaches of his fiduciary

duties the
Town suffered pecuniary harm in an amount to be detennined at trial.
TIDRD CAUSE OF ACTION

AGAINST MEI
(Fraud)
135. The Town repeats and realleges the foregoing allegations as though they were
136. Mei was a Town employee and a Deputy Town Attorney and, as such, had a duty
to disclose material facts relating to the Town, its concessions, and its concess
ionaires to the
Town.
13 7. For a period of years, Mei concealed his unauthorized dealings with Singh,'Garry
and Harris Beach from the Town. In particular, Mei conspired with Singh
to (i) convince
Phoenix and Atalaya to make lump sum payments to Singh's businesses in amount
s far greater
than would be necessary to complete the contractually-required improvements
to the Town
facilities and (ii) purport to obligate the Town to guarantee millions of dollars in
loans to SRB
and HVS in the event of a default by Singh on his obligations to those lenders.
138. In so doing, Mei knew that he was breaching his professional and fiduciar
y
obligations to his client - the Town - and exposed the Town to the false claims
of the lenders
who would ultimately seek millions of dollars in "guarantee" payments from the Town.
139. The Town justifiably relied on Mei, a senior employee and Deputy Town
Attorney, to act in good faith and disclose his dealings with Singh, Harris Beach,
Garry, Phoenix,
34 of so
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INDEX NO. 606132 /2017
NYSCEF DOC. NO. 2
and Atalay a to the Town.
140. As a direct and proxim ate result of Mei's fraud the Town has suffere
d and is
continu ing to incur actual damages, including the costs of defend
ing itself against lawsui ts
brought by Phoenix and Atalaya, ih an amoun t to be detenn ined at trial.
FOURTH CAUSE OF ACTION

AGAINST MEI
(Fraudulent Concealment)
they were
142. As a Deputy Town Attorney and a senior Town employee, Mei owed
fiduciary
and other duties to the Town.
143. The Town reasonably relied on Mei to cany out bis obligations as a Deputy
Town
Attorney in good faith, to act as an honest liaison between the Town and
its concessionaires,
including Singh, and to keep the Town abreast of material developments
with respect to the
Town' s concessions.
144. Despite these obligations, Mei intentionally concealed material facts relating
to
the Unauthorized Agreements from the Town, including (i) his negotia
tions with lenders,
including NDH, Phoenix and Atalaya, in connec tion with the Woodl
ands Loan, the TOBA Y
Loan and the Tappen Beach Loan, (ii) his purpor ted retentions of
Garry and Harris Beach, and
(iii) the very existence of the Unauthorized Agreements, in order
to mislead and defraud the
Town.
145. As a direct and proximate result of Mei's fraudulent concealment

the Town
suffered pecuni ary harm in an amoun t to be determ ined at trial.
FIFTH CAUSE OF ACTION

AGAINST HARENDRA SINGH, SRB CATERING, SRB CONCESSIO
N & HVS
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(Aiding and Abetting Breach of Fiduciary Duty)
146. The Town repeats and realleges the foregoing allegations as

though they were
147. Mei owed fiduciary duties to the Town and breached those duties
as described
above, including when he devised and participated in the schem
e to defraud the Town, purpo rted
to oblige the Town to guarantee millions of dollars of loans paid
to Singh and his businesses, and
accepted cash bribes and other kickbacks from Singh.
148. Singh knew that Mei owed fiduciary duties to the Town and,
acting on his own
behalf and through SRB Catering, SRB Concession and
HVS, knowingly induced and
participated in Mei's breaches of those duties, including by bribin
g Mei with tens of thousands of
dollars in cash payments, all-expenses-paid luxury trips to India
and South Korea, and tens of
thousands of dollars of car payments, and by helping Mei conce
al Mei's breaches of his fiduciary
duties to the Town.
149. The Town suffered pecuniary harm in an amount to be detenn

ined at trial as a
direct and proximate result of Mei's breaches of his fiduciary
duties to the Town.
SIXTH CAUSE OF ACTION

AGAINST HARENDRA SINGH, SRB CATERING, SRB CONC
ESSION & HVS
(Fraud)
though they were
151. Singh, SRB Catering, SRB Concession, and HVS were

trusted Town
concessionaires and parties to multiple long-tenn contracts with
the Town. As such, they had
duties to disclose material facts relating to the TOBA Y,
Woodlands and Tappen Beach
concessions to the Town.
152. For a period of years during which they had repeated regul~
interactions with the
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Town, and entered into successive validly-authorized agreements with

the Town (including the
2013 Tappen Beach Agreement, the 2014 Woodl ands Amendment,
and the 2014 TOBA Y
Amendment), Singh, SRB Catering, SRB Conce ssion and HVS concea
led their unauthorized
dealings with Mei, Harris Beach, Garry, Phoeni x and Atalay a from
the Town and misrepresented
to the Town that they were acting in good faith and in compliance
with all of their material
obligations to the Town. Singh also failed to inform the Town that
he was conspiring with and
bribing Mei to purport to bind the Town to make millions of dollars
in payments to lenders,
including Phoenix and Atalaya, in the event that SRB Catering,
SRB Concession, or HVS
defaulted on any of their loan obligations.
153. Singh, SRB Catering, SRB Concession, and HVS knew {i) that their
fraudulent
acts constituted events of default under the 2000 Woodlands
Agreement, 2005 TOBA Y
Agreem ent and 2013 Tappen Agreement, respectively, (ii) that
SRB Catering and SRB
Concession would default on the Woodlands Loan and the TOBA
Y Loan, and (iii) that HVS
would default on the Tappen Beach Loan, thereby causing Phoenix
and Atalay a to seek million s
of dollars in purported "guara ntee" payments from the Town. They
also knew that the Town
would be forced to incur expenses defending itself from claims that
it had obligations to those
lenders.
154. The Town justifia bly relied on Singh, SRB Catering, SRB Concession,
and HVS
to behave in good faith and to disclose material information regarding the
Woodlands, TOBA Y
and Tappen Beach concessions.
155. The Town has suffered and is continuing to incur actual damages,
including the
costs of defending itself against lawsuits brough t by Phoenix and
Atalaya, in an amount to be
determined at trial, as a direct and proximate result of Singh' s fraud
and that of SRB Catering,
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SRB Concession and HVS.
SEVENTH CAUSE OF ACTION

AGAINST HARENDRA SINGH, SRB CATERING,
SRB CONCESSION & HVS
(Breach of Contract)
156. The Town repeats and realleges the foregoing allega
tions as though they were
157. Singh, SRB and HVS were parties to binding and enfor
ceable contracts with the
Town that required the Singh Entities to (i) pay mont
hly concession fees to the Town and (ii)
make millions of dollars of capital improvements to
the Town's Woodlands, TOBAY, and
Tappen Beach facilities.
158. SRB Catering is party to the Authorized Woodlands

Agreements, which required
SRB Catering to make thousands of dollars of monthly
concession fee and other payments to the
Town and to complete $12,100,000 in capital improveme
nts to the Woodlands facilities.
159. SRB Catering did not make the contractually-required
regular monthly payments
to the Town. On the contrary, at the time of the termi
nation of its concession agreement, SRB
Catering was at least $190,000 in arrears of those paym
ents. Moreover, SRB Catering also failed
to make all of the improvements that it was required
to make pursuant to the tenns 'of the
Authorized Woodlands Agreements.
160. SRB Concession is party to the Authorized TOBAY

Agreements, which required
SRB Concession to make thousands of dollars of mont
hly concession fee and other payments to
the Town and to complete $7,600,000 in capital improveme
nts to the TOBA Y facilities.
161. SRB Concession did not make the contractually-require
d monthly payments to the
Town. On the contrary, at the time of the tenninatio
n of its concession agreement, SRB
Concession was at least $60,000 in arrears of those paym
ents. Moreover, SRB Concession also
failed to make all of the improvements that it was requi
red to make pursuant to the terms of the
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Authorized TOBAY Agreements.
162. HVS is party to the 2013 Tappen Agreement, which required HVS
to make
thousands of dollars of monthly concession fee payments to the Town and
also required HVS to
make approximately $1,015,000 of capital improvements to the Tappen Beach
facilities.
163. HVS did not make regular payments of the required monthly conces
sion fees
payable to the Town. On the contrary, at the time of the termination of its
concession agreement,
INS was at least $55,000 in arrears of those payments. Moreover, HVS
also failed to make the
improvements it was required to make pursuant to the 2013 Tappen Agreem
ent.
164. The Town has fully performed all of its material obligations under the Author
ized
Woodlands Agreements, Authorized TOBAY Agreements and 2013 Tappen
Agreement.
165. The Town has suffered pecuniary hann in an amount to be determined
at trial as a
direct and proximate result of Singh's, SRB's and HVS's breaches of the
Authorized Woodlands
Agreements, Authorized TOBAY Agreements and 2013 Tappen Agreem
ent, respectively.
EIGHTH CAUSE OF ACTION

AGAINST HARENDRA SINGH, SRB CATERING, SRB CONCESSIO
N & HVS
(Breach of Implied Covenant of Good Faith and Fair Dealing)
166. The Town repeats and realleges the foregoing allegations as though they
were
167. SRB Catering is party to the Authorized Woodlands Agreements.

SRB
Concession is party to the Authorized TOBA Y Agreements. HVS is party
to the 2013 Tappen
Agreement.
168. Singh, SRB and HVS breached the implied covenant of good faith
and fair
dealing in each of these contracts by, among other acts:
a. scheming with and bribing Mei to participate in the improper scheme

to obtain
loan funds, including the funds ultimately paid out by Phoenix and Atalay
a; and
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b. purporting to enter into the bogus Unauthorized Agreements and Unauthori zed
SRB Assignment Agreements, thereby attempting to obligate the Town to
guarantee millions of dollars of loans made to the SRB and HVS.
169. As a direct and proximate result of these actions by Singh, SRB and HVS, the
Town was deprived of its expectation that, in Singh, SRB and HVS, it had trusted, long-term
contract counterparties capable of providing reliable food and beverage services to Town
residents and guests at the Town's Woodlands, TOBAY and Tappen Beach facilities.
170. The Town has suffered pecuniary harm in an amount to be determined at trial as a
direct and proximate _result of Singh's, SRB's and HVS's breaches of the implied covenants of
good faith and fair dealing in their respective Town contracts, including because the Town has
been forced to expend significant resources: identifying and negotiating with new
concessionaires at extremely short notice; investigating Singh and Mei's improper activities;
responding to inquiries from law enforcement agencies regarding those activities; and defending
itself against lawsuits brought by Singh's creditors, including Phoenix.
NINTH CAUSE OF ACTION

AGAINST SRB CATERING, SRB CONCESSION,
HARENDRA SINGH & RUBY SINGH
(Unjust Enrichm ent/ Money Had and Received)
172. On or around Novembe r 18, 2011, SRB Catering received loan proceeds in
connection with the Woodlands Loan.
173. On or around June 22, 2012, SRB Concession received loan proceeds m
connection with the TO BAY Loan.
174. On or around July 16, 2014, HVS received loan proceeds in connection with the
Tappen Beach Loan.
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175. Haren dra Singh is the president of SRB Catering, SRB Conce
ssion, and HVS.
Ruby Singh is the chief executive officer, vice president and
secretary of SRB Catering, SRB
Concession and HVS. Haren dra and Ruby Singh are the only
officers of SRB Catering, SRB
Concession, and HVS.
176. Pursuant to its agreements with SRB Catering, SRB Conce

ssion, and HVS, the
Town was entitled to benefit from millions of dollars in
improvements to the Woodlands,
TOBA Y and Tappen Beach facilities, respectively. The Wood
lands Loan, TOBA Y Loan and
Tappen Beach Loan proceeds were not used to fund the impro
vements to which the Town was
entitled, however. Instead, those funds remaining after Mei and
Harris Beach were compensated
for their participation in the scheme described herein were diverte
d to Harendra Singh's and
Ruby Singh 's other business and/or personal affairs. SRB Catering,
SRB Concession, Harendra
Singh and Ruby Singh thus benefited from the financings receiv
ed from Phoenix Life, PHL, and
Atalaya at the expense of the Town.
177. SRB Catering, SRB Concession, Harendra Singh and Ruby

Singh should not be
pennitted to keep the loan proceeds resulting from their fraudulent
scheme. Instead, equity and
good conscience require that the funds be used to provide for
restitution for the Town, including
to fund the improvements required to be provided at Wood
lands, TOBA Y and Tappen Beach
and to reimburse the Town and its taxpayers for expenses incurr
ed as a result of the loan
transactions described herein.
TENTH CAUSE OF ACTION

AGAINST HARRIS BEACH AND GARRY
(Aiding and Abetting Breach of Fiduciary Duty)

though they were
179. Mei owed fiduciary duties to the Town and breached those
duties as described
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above, including by accepting Singh's bribes and participating in a scheme to

defraud the Town.
180. Harris Beach and Garry knew that Mei owed fiduciary duties to the Town
and
knowingly participated in Mei's breache s of those duties, including by (i) purport
ing to represent
the Town in negotiations and other dealings with the Lender Parties, (ii) preparin
g and executing
the opinion letters provided to NDH in connection with the Woodlands Loan and
the TOBA Y
Loan, and (iii) helping Mei conceal breaches of his fiduciary duties from the Town.
181. The Town suffered pecuniary harm in an amount to be determined at trial

as a
direct and proximate result of Mei's breach of his fiduciary duties to the Town.
ELEVENTH CAUSE OF ACTION

AGAINST HARRIS BEACH AND GARRY
(Aiding and Abetting Fraud)
183. Harris Beach and Garry knew of the scheme concocted by Singh and Mei
to
defraud the Town by purporting to obligate the Town to make mil1ions of dollars
in payments to
PhoenLx and provided substantial assistance in connection with the perpetra
tion of that scheme,
incl"-ding by purporting to represent the Town in connection with the negotia
tion of the
NOH/Phoenix loans to Singh, by providing the Harris Beach Opinion Letters
provided to NOH
in connection with the Woodlands Loan and the TOBAY Loan, all while knowin
g that the Town
Board was not aware of any of the transactions complained of herein.
184. As a direct, proximate and foreseeable result of Harris Beach's misconduct,.

the
Town has been damaged in an amount to be determined at trial.
TWELFTH CAUSE OF ACTION

AGAIN ST PHOEN IX LIFE AND PHL
{Aiding and Abettin g Breach of Fiducia ry Duty)
were
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186. Mei owed fiduciary duties to the Town and breached those duties as described
above, including when he devised and participated in the scheme to purport to obligate
the Town
to make millions of dollars of "guarantee" payments to Phoenix in return for cash bribes and
other kickbacks from Singh.
187. Phoenix Life and PHL knew that Mei was a Deputy Town Attorney and that he
owed fiduciary duties to the Town. They nonetheless knowingly induced and participated in
Mei's breaches of those duties, including by encouraging and participating in the scheme to
defraud the Town by purporting to bind the Town to guarantee millions of dollars of Phoenix
loans to SRB and waive any defenses to the payment of such guarantees, and by concealing
Mei's breaches from the Town.
188. In particular, Phoenix Life and PHL knew that:
a. Mei was the only Town employee with whom they had any contact
while
negotiating the Woodlands Loan and TOBAY Loan;
b. Mei was acting well outside of his authority as a Deputy Town Attorney in all of
his interactions with Phoenix;
c. the loans at issue were for millions of dollars more than the value of the
improvements that the respective SRB entities were required to perform at the
Town's Woodlands and TOBAY facilities;
d. the Town Board did not consider the new agreements during any public meeting;
e. no Town Board resolutions were prepared or presented to the Town Board, and
the Town Board did not authorize the Town to enter into either the Unauthorized
Woodlands Amendment or the Unauthorized TOBA Y Amendment;
f. the Unauthorized Woodlands Amendment and Unauthorized TOBAY

Amendment purported to obligate the To\\-n to guarantee millions of dollars of
loans made by Phoenix to SRB,. even though such guarantees are prohibited by
the State Constitution;
g. loan proceeds were paid directly to SRB in single lump sum payments at the
closing of each loan transaction, rather than in periodic payments upon SRB's
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completion of capital improvement construction milestones;

h. the interest rates on the loans were not commensurate with what would have been
charged bad the loans been legitimate financings in which the Town was lawfully
obligated to fund unpaid amounts; and
i. Mei purported to obligate the Town to waive all of its legal and equitable defenses
to making payments on the guarantee, including set-off, even if the Town
received no benefit whatsoever because SRB made no improvements to
the
Town's facilities.
189. The Town suffered pecuniary harm in an amount to be determined at trial as
a
direct and proximate result of Phoenix's aiding and abetting in Mei's breaches of
his fiduciary
duties to the Town.
THIRTEENTH CAUSE OF ACTION

AGAINST PHOENIX LIFE AND PHL
(Aiding and Abetting Fraud)
I 90. The Town repeats and realleges the foregoing allegations as though they were
191. Phoenix Life and PHL knew of the scheme concocted by Singh and Mei to
defraud the Town and provided substantial assistance in connection with the perpetra
tion of that
scheme, including by agreeing to provide the funds to Singh, and by participating
in the scheme
to purport to obligate the Town to guarantee Singh's loans and waive any defense
s to the
payment of such amounts.
192. In particular, Phoenix Life and PHL;
a. agreed to participate in the Woodlands Loan and TOBAY Loan transactions

despite knowing that Mei was acting well outside of his authority as a Deputy
Town Attorney and was, in fact, hiding the transactions from the Town;
b. made millions of dollars of lump sum payments to SRB without requiring that
even a single dollar be spent at the Town's Woodlands and/or TOBA Y
concession facilities;
c. knew that the Unauthorized Wood]ands Amendment and the Unauthorized

TOBA Y Amendment were improper because they violated the State Constitution
44 of SO
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and were not considered or approved by the Town Board;

d. knew that the interest rates on the loans were not comme nsurate with what
would
have been charged had the loans been legitimate financings in which the Town
was lawfully obligate d to fund unpaid amounts; and
e. sought to tie the Town's hands by requiring Mei to purport to obligate the Town
to waive any legal or equitable defenses the Town had to payment of the
guarantee.
193. As a direct, proximate and foreseeable result of Phoenix's aiding and abetting the
fraudulent scheme, the Town has been damaged in an amount to be determined at trial.
FOURTEENTH CAUSE OF ACTION

AGAINST PHOENIX LIFE AND PHL
(False Claims)
195. On February 26, 2016, Phoenix Life and PHL delivered the Improper Phoenix
Life Claim and the Improper PHL Claim, respectively, to the Town demand
ing millions of
dollars be made in lump sum payments within sixty days to make Phoenix whole
after SRB's
defaults on the TOBAY Loan and Woodlands Loan.
196. Phoenix Life and PHL made claims against the Town demanding payment on the
unauthorized guarantees with knowledge of, or in deliberate ignorance or reckless

disregard of,
the fact that the Unauthorized TOBA Y Amendment and Unauthorized Woodlands
Amendment
were executed in connection with Singh's fraudulent scheme and were not authoriz
ed by the
Town Board, and that any guarantees of SRB, s debts purpo1tedly contained
within those
agreements were therefore entirely invalid.
197. Phoenix Life and PHL are liable for the Improper Phoenix Life Claim and
Improper PHI.. Claim under New York State Finance Law 189( I)(a), which creates
liability for
any person who knowingly presents a false or fraudulent claim for payment or approval
to a local
45 of SO
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NYSCEF DOC. NO. 2
government authority such as the Town. The Town is entitled to a civil penalty, plus three
times
the amount of all damages, including consequential damages, that the Town has sustained and
will sustain as a result of Phoenix Life's and PHL's false claims.
FIFTEENTH CAUSE OF ACTION

AGAINST MEI, GARRY, AND HARRIS BEACH
(False Claims)
198. The Town repeats and realJeges the foregoing allegations as though they were
199. In the course of negotiating, drafting, and closing on the Unauthorized Woodlands
Amendment and the Unauthorized TOBAY Amendment, Mei, Garry, and Harris Beach
knowingly made, used, or caused to be made or used, a false record or statement material to the
Improper Phoenix Life Claim and the Improper PHL Claim, including, without limitation, the
Harris Beach Opinion Letters., the Mei Opinion Letters, the Unauthorized Woodlands
Amendment, and the Unauthorized TOBA Y Amendm ent Each of these documents was false,
fraudulent, unlawful, and otheiwise W1authorized by the Town Board.
200. The Harris Beach Opinion Letters, the Mei Opinion Letters, the Unauthorized
Woodlands Amendment, and the Unauthorized TOBAY Amendment purported to obligate the
Town to make payment for any default amounts under the various loans, and such purported
obligations were backed by the opinions of NJ'ei, Garry, and Harris Beach. Indeed, Mei and
Garry drafted the Unauthorized Woodlands and TOBAY Amendments which purported, on their
face, to obligate the Town to make payment to Phoenix in the event of Singh defaulting on his
Joan obligations. Similarly, Mei, Garry, and Harris Beach issued letters in which they falsely
rendered the opinion that the Unauthorized Woodlands and TOBAY Amendments obligated the
Town to make payment to Phoenix in the event of Singh defaulting on his loan obligations.
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NYSCEF DOC. NO. 2
201. These false records and statements, along with others, are materia
l to the false
claims made by Phoenix Life and PHL to the ToYtn because they purpor
ted to obligate Town to
make payments to Phoen ~ have been cited by Phoenix in support of the Improp
er Phoenix Life
Claim and the Improper PHL Claim, and could have influenced the
payment of money by the
Town to Phoenix had the Town not recognized them as false,
fraudulent, unlawful, and
unauthorized by the Town Board.
202. Mei, Garry, and Harris Beach are liable under New York State Finance Law

189(1)(b), which creates liability for any person who knowingly makes,
uses, or causes to be
made or used, a false record or statement material to a false or fraudu
lent claim. The Town is
entitled to a civil penalty, plus three times the amount of all damag
es, including consequential
damages, that the Town has sustained and will sustain as a result of, among
other things, the Mei
Opinion Letters, the Harris Beach Opinion Letters, the Unauthorized Woodl
ands Amendment,
and the Unauthorized TOBAY Amendment.
SIXTEENTH CAUSE OF ACTION

AGAINST MEI, SINGH, SRB CATERING, SRB CONCESSION & HVS
(Implied Indemnification)
were
204. The Town has been forced to expend millions of taxpayer dollars (i) investi
gating
the improper acts and omissions of Mei, Singh, SRB and HVS,
(ii) cooperating with law
enforcement investigations into Mei and Singh, and (iii) defending
itself against civil litigation
claims brought by Phoenix and Atalaya as a direct result of Defend
ants' scheme to obtain
miHions of dollars of loan funds for Singh, SRB and HVS and to purport to
obligate the Town to
guarantee those funds.
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205. The Town is entitled to indemnification by Mei, Singh, SRB

Catering, SRB
Concessio~ and HVS for expenses incurred by the Town as
a direct and proximate result of
Defendants' scheme, including any judgments that may ultimately
be rendered against the Town
in any civil cases arising out of that scheme.
SEVENTEETH CAUSE OF ACTION

AGAINST HARENDRA SINGH, SRB CATERING, SRB CONC
ESSION & HVS
(Contribution)

though they were
207. The Town has been forced to expend millions of taxpayer dollars (i)
investigating
the improper acts and omissions of Mei, Singh, SRB and HVS,
(ii) cooperating with law
enforcement investigations into Mei and Singh, and (iii) defending
itself against civil litigation
claims brought by Phoenix and Atalaya as a direct result of Defen
dants' scheme to obtain
millions of dollars of loan funds for Singh, SRB and HVS and to
purport to obligate the Town to
guarantee those funds.
208. The Town is entitled to contribution from Mei, Singh, SRB Cateri
ng, SRB
Concession, and HVS in the event that any civil litigation arising out
of the improper acts and
omissions described in this Complaint leads to a judgment against the
Town.
[Remainder of page intentionally left blank.]
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NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 06/26/2017
Prayer for Relief
WHEREFORE, the Town of Oyster Bay respectfully requests:
(a) compensatory and punitive damages in amounts to be determined at trial, together

with pre-judgment interest at the maximum rate allowable by law;
(b) reasonable costs and expenses incurred in this action, including, to the extent
applicable, counsel fees; and
(c) such other relief as the Court deems just and proper.
Dated: Oyster Bay, New York

June 26, 2017
TOWN OF OYSTER BAY
54 Audrey Avenue
Oyster Bay, NY 11771
Tel: 516-624-6150
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NYSCEF DOC. NO. 2
Index No.:
TOWN OF OYSTER BAY,
Plaintiff,
-against-
HARENDRA SINGH, S.R.B. CONVENTION &

CATERING CORP., SRB CONCESSION, INC,
RVS TAPPAN BEACH, INC., RUBY SINGH,
FREDERICK MEI, HARRIS BEACH, PLLC,
WILLIAM J. GARRY, PHOENIX LIFE INSURANCE
CO., and PHL VARIABLE INSURANCE CO,
Defendants.
SUMMONS AND COMPLAINT
JOSEPH NOCELLA
TOW N ATTORNEY
TOW N OF OYSTER BAY
Attorneys for Defendant Town
54 Audre y Avenue
Oyster Bay, New York 11771
(516) 624-6150 (voice)
(516) 624-6196 (facsimile)

**Not for Service**
so of SO
,.
'
AMENDMENT TO CONCESSION AGREEMENT
PARTIES: TOWN OF OYSTER BAY, a municipal corporation of the State of

New York, having its principal office at Town Hall, Audrey
Avenue, Oyster Bay, New York 11771, and hereinafter referred to
as the "TOWN acting for and on behalf of the DEPARTMENT
11
;
OF PARKS, and hereinafter referred to as the "DEPARTMENT';
SRB CONCESSION, INC., having its principal place of business

at 150 Hicksville Road, Bethpage, New York 11714, hereinafter
referred to as the "CONCESSIONAI RE".
WITNESSETH :
WHEREAS, by Resolution No. 312-2005, adopted on April 19, 2005,' the pames
hereto entered into an agreement (the. "Agreement") for the operation of a food and beverage
concession at TOBA Y Beach f'TOBA Y"), for the period from May 1, 2005 through April 30,
2025, and for CONCESS(ONAIR.E to make capital improvements in the amount of $1,000,000
to TOBA Y by April 30, 2015; and
WHEREAS, by Resolution No. 8882008, adopted on September 16, 2008, the
parties amended the Agreement to require the CONCESSIONAIRE to make additional capital
improvements to TOBA Y, in the amount of $2,500,000, to be completed prior to April 30, 2015,
and exercised the two ten.year renewal options contained in the Agreement~ and
WI IEREAS. to dati:. tht: CONCESSIONAIRE has completed capital
improvements al TOBA Y of approximately$ I~ 782,662; and
WHEREAS, the TOWN and the CONCESSIONAIRE wish to further amend the
Agreement in connection with the CONCESSIONAIRE'S obtaining financing for the required
capital improvements to TOBA Y and other matters.

r
'
AMENDMENT TO CONCESSION AGREEMENT

Avenue, Oyster Bay, New York 11771 and hereinafter referred to
1
as the "TOWN"; acting for and on behalf of the DEPARTMENT

OF PARKS, and hereinafter referred to as the "DEPARTMENT';
SRB CONCESSION, INC., having its principal place of business

at 150 Hicksville Road, Bethpage, New York 11714, hereinafter
referred to as the CONCESSIONAIRE1 \
WITNESS ETH:
WHEREAS. by Resolution No. 312-2005, adopted on April 19, 2005, Uie pumes
hereto entered into an agreement (the uAgreement,,) for the operation of a food and beverage
concession at TOBA Y Beach C'TOBA Y"), for the period from May I, 2005 through April 30,
2025, and for CONCESSIONAIRE to make capital improvements in the amount of $1,000,000
to TOBA Y by April 30,201 S; and
WHEREAS, by Resolution No. 888-2008, adopted on September 16, 2008, the
parties amended the Agreement to reqtiire the CONCESSIONAIRE to make additional capital
improvements to TOBA Y, in the amount of $2,500,000, to be completed prior to April 30, 2015,
and exercised the two ten-year renewal options contained in the Agreement; and
WIIEREAS. to dat~. the! CONCESSIONAIRE has completed capital
improvements at TODAY of approximatdy $1 ~ 782.662; and
WHEREAS, the TOWN and the CONCESSlONAIRE wish to further amend the
capital improvements to TOBA Y and other matters.

Accordingly, the TOWN and the CONCESSIONAIRE agree as follows:
1. The following subparagraph (i) is added to Paragraph 32 of the

Agreement:
"i) A default or event of default occurs under

CONCESSIONAJRE'S credit facility with Madison
National Bank ("Credit Facility,,) which continues
beyond any applicable period for grace and cure.
With respect to any default under this subparagraph
(i) of Paragraph 32 of trus Agreement,
CONCESSIONAIRE'S period of grace and cure
shall be controlled by the loan documents for the
Credit Facility, and the 60 day period set forth in
the full paragraph following this subparagraph (i)
shall not apply.,,
2. The existing second to last paragraph of Paragraph 32 of the Agreement is
deleted in its entirety, and replaced with the following:
''If the TOWN terminates the Agreement for any

reason prior to April 30, 2015 the TOWN shall pay
1
CONCESSIONAIRE a tennination payment equal

to the greater of (a) $1,500,000 or (b) if but only if
the TOWN terminates this Agreement for any
reason other than the default of the
CONCESSIONAIRE, the TOWN shall pay to the
CONCESSIONAIRE a sum equal to 5% of the
capital improvements made to the facility by the
CONCESSIONAIRE, for each year or part ofa year
remaining in the initial term of this Agreement,
including any remaining renewal options, up to
100% of the value of said improvements, in either
case of(a) or (b) if and only if CONCESSIONAIRE
and Harendra Singh have executed and delivered to
the TOWN the General Release and Covenant not
to Sue substantially in form and substance as set
forth in Exhibit A attached hereto. After April 30,
201 S, if the TOWN terminates this Agreement for
any reason other than the default of the
CONCESSIONAIRE, the TOWN shall pay to the
CONCESSIONAIRE a sum equal to 5% of the
capital improvements made to the facility by the
CONCESSIONAIRE, for each year or part of a year
2
,
including any remammg renewal options, up lo

t 00% of the value of said improvements.
3. In accordance with Paragraph 32 of the Agreement, the

CONCESSIONAIRE hereby assigns to and designates Madison National Bank, 888 Veterans
Highway, Suite 400, Hauppauge, New York 11788, (631) 297 5904, attention Thomas N.
4
Gilmartin, as the financing entity entitled to receive amounts payable from the TOWN to the
CONCESSIONAIRE pursuant to paragraph 32 of the Agreement, and the TOWN hereby
consents to such assignment.
[End of text. Signatures appear on the following page.]

IN WITNESS WHEREOF, SRB CONCESSION, INC. and the TOWN OF OYSTER
BAY have executed this Amendment to the Agreement on the dates indicated below.
Dy:
Tit e: Supervisor
Date Signed: June~, 2010
Reviewed by:
c..-S: ~
Deputy Town Attorney
SRB CONCESSION, INC.
By: GJ!2 J-1/h<ENOQ.Q S.'1N0~

~:sident
Date Signed: June_, 2010
Agreed as to paragraph 2 hereof:
Haren~-
STATE OF NEW YORK)

) ss.:
COUNTY OF NASSAU )
On this 'A.." day of -:S-,.A.'i\e. , 2010, before me personally came

,::(oh.:, ie."A&i \\o , to me known, who, being by me duly sworn, did depose and say that he
resides at I\S"- ~\~C!i(\uc , \-\A~,.~~C.'\!A.~ fi; that he is the Su.ec:.~-<,so<Z- of the Town of
Oyster Bay, the municipal corporation described herein and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of th Town Boai of said corporation, and
that he signed his name thereto by like order. i:_ 1 ~ " /I
/ ?rl,./l, ~Ve>
STATE OF NEW YORK )

)ss:
COUNTY OF )
On the _2_ day of ....-..........: - - - ' 2010, before me, the undersigned, personally
appeared Harcndra Singh, pers ally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity, and that by his/her
signature on the instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrnment. /) .
~-~
.=::...:::..;:; ;.::..::=::=.c ,.:....~~~~...6 -~"""'
Notary Publi
,.,
,
Exhibit A
General Release of all Liability
SRB Concession Inc. and Harendra Singh, for themselves and each of their affiliates, and
their respective, successors and assigns (collectively, "Releasing Parties"), in consideration of a
payment from Town of Oyster Day in connection with the termination of a certain Concession
Agreement dated April 19, 2005, as amended ("Concession Agreement"), hereby releases,
waives and forever discharges the Town of Oyster Bay, its elected and appointed officials, and
its employees, agents and attorneys (collectively, "Released Parties,,), from all actions, causes of
nction, suits, debts, sums of money, accounts, invoices, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands, in
law or equity, which any one or more of the Releasing Parties ever had, now have or may have had
against any one or more of the Released Parties for any reason, from the beginning of the world to
the date of this Release.
The Releasing Parties agree that the release contained herein is an essential and material
tem1 of this Release and that the payment made by the Town of Oyster Bay in connection with
this Release is intended to be in full satisfaction of any alleged injuries or damages suffered or
incurred by the Releasing Parties.
None of the Releasing Parties shall institute any action or proceeding, at law or in equity,
against any Released Party, nor institute, prosecute or in any way assist, cooperate with or
provide information to any person in the institution or prosecution of any claim, demand, action,
or cnuse of action for damages, costs, loss of services, expenses, or compensation for or on
account of any damage, loss or injury either to person or property, or both relating to or arising
out of the tennination of the Concession Agreement.
The person signing this Release and Covenant not to Sue on behalf of the undersigned
wn.mmts and represents to the Released Parties that it hos full right and authority to execute this
Release for itself nnd on behalf of the other Releasing Parties.
Dated: -1:.~ t q , 8.fl.l.lL, 20_ SRil Concession, Inc.
Br~l+A:1 @Ji)fl//5 1h{f(

STATE OFN2tu ~o,e../c ) ss.:

COUNTY OF ~ss Q..t._ )
On the,_2 day or/1 _-,. in the year 20.J.Q_, before me, the undersigned, personally appeared
Harendra Singh, ~ y known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his capacity, that by his/her/their signature on the
instrument, the individual, or the person upon behalf of which the individual acted, executed the
instrument.
flt u~
(Signature andficeo find~ BARANtLLO
tnking ncknowledgment.~ 0 tarv ~ublic, Slate of t~ew ,urk
aual\f ,ed In f :a :~t, ,.. oumy
No. 30-4620~~4. ~ t , . { '
T@r.m ~~r.pitlH Mu',' .,1, r ~ r
~n:11>1:J vl
DEFA ULT ASSI GNM ENT OF CON CESS ION AGR

EEM ENT PRO CEE DS
DATED: June l'<', 2010

ASSIGNOR: SRB Concession Inc.
ASSIGNEE: Madison National Ba~ and its successors and assigns

CON CESS ION
AGREEMENT: Between Town of Oyster Bay ("TOBAY") and SRB Conc
ession Inc. dated
April 19, 2009 pursu ant to Resolution No. 312-2 005
adopted on April 19,
2005, as amended pursuant to Resolution No. 8882 008, as
further amended
by Amendment to Concession Agreement dated June L
2010, for the
operation of a food and beverage concession at the Town of Oyste
r Bay Beach
(the "Concession") and for capital improvements to
the Concession
(collectively, the ccconcession Agreement")
Assignor hereby assig ns to Assignee all payments and any other sums
are now due, claimed to be due, or wiU become due under of money which
by reason of or arising out of the
Concession Agreement., including, without limitation, payments
which are payable to Assignor
under and pursuant to Paragraph 32 of the Concession Agree
ment.
This Assignment is made as collateral security for a certam i
1.500.000 line of credi thhe
"Line of Credit") made available by Assignee to Assignor. If
there is an event ot default under
the Line of Credit (an "Event of Default"), which default remai
ns uncured beyond the expiration
of any applicable notice or cure period, then Assignor agrees
that Assignee, as its interests may
appear, may serve a Default Notice (as hereinafter defined)
upon TOBAY. After service of a
Default Notice upon TOBAY, the Assignee shall be entitled
to, with respect to the Concession
Agreement, to receive and collect any and an monies due, claim
ed to be due and to become due
as aforesaid, and to give all releases, required to be given theref
or, and the Assignor does hereby
appoint the Assignee true and lawful attorney, irrevocably for
it, and in its name and stead and
for the Assignee's own benefit to ask, demand, collect, receiv
e and sue for the monies due (as
hereinafter more specifically set forth) or to become due as afores
aid, and to do any and all acts
and things necessary or proper in connection therewith, with
the same force and effect as the
Assignor could have done had this Assignment not been made
, hereby ratifying and confirming
all that said Assignee may lawfully do by virtue thereof.
TillS ASSIG-m.IBNT is coupled with an interest and is and

shall be irrevocable.
AND, the Assignor does hereby agree that it will make, execu
te and deliver any and all
future papers, instruments and documents that may reasonably
be required by the Assignee, its
successors and assigns, to effectuate the purposes hereof
AND, the Assignor covenants that it will receive any monies

paid by TOBA Y under the
Concession Agreement and will hold such monies as trust funds
to be first applied to payments
payable by Assignor under the tenns of the Line of Credit and that it will apply the same to such
payments only, before using any part of the monies for any other purpose. Nothing in this
covenant shall be considered as imposing upon the Assignee any obligation to see to the proper
application of the monies advanced under such assignment by the Assignor.
AND, the Assignor, Assignee and TOBAY, by countersigning this Agreement, agree as
follows:
(a) Assignor shall provide Assignee with copies of all notices provided under
the Concession Agreement received from TOBAY promptly after receipt of any such notice,
whether such notice is pursuant to Paragraph 32 of the Concession Agreement or under any
other provision of the Concession Agreement.
(b) TOBAY shall give Assignee copies of all notices given to Assignor
pursuant to Paragraph 32 of the Concession Agreement and any notice of default or demand
served on Assignor by TOBAY under the tenns of the Concession Agreement, at the same time
T0BAY gives such notice to Assignee.
(c) Assignee shall give TOBAY copies of any notice of default or demand for
payment served on Assignor by Assignee under the terms of the Line of Credit, at the same
time
Assignee gives such notice to Assignor.
(d) AU notices required hereunder shall be made by hand or by a nationally

recognized overnight mail service at the following address and shall be effective upon receipt
of
delivery:
To the Assignor: S~ Concession Inc.

One Southwoods Road
Woodbury, New York 11797
Attention: Harenda Singh, President
With a copy to: Howard Greenberg, Esq.

180 East Main Street
Suite 308
Smithtown, New York 11788
To the Assignee: Madison National Bank

888 Veterans Memorial Highway
Suite 400
Hauppauge, New York 11788
Attention: Thomas N. Gilmartin, Executive
Vice President and Chief Lending Officer
With a copy to: Rick Steiner Fell & Benowitz, LLP

9-0 Broad Str~ 25 th Floor
New York, New York 10004
Attention: Jacob Steiner, Esq.
2
ToT OBA Y: Town of Oyster Bay

Town Hall
Audrey Avenue
Oyster Bay, New York 1177 l
Attention: Notice Desk
With a copy to: Rivkin Radler LLP

926 RXR Plaza
Uniondale, New York 115S6
Attention: William Comachio, Esq.
(e) Within five (5) business days after
certification by Assignee that an Event of Default whic receipt by TOBAY of a notice with
h remains uncured beyond the expiration
of any applicable notice and cure period unde
r the Line of Cred it (the "Default Notice"),
TOBAY shall pay any amounts due or to become
to Assignor under the Concession Agreement
(including, without limitation, amounts that may be
due under Paragraph 32 thereof) to Madison
National BanJc., making payment at such times and
in such manner as the same would otherwise
be payable to Assignor.
(f) Assignor and TOBAY expressly agree that a Defa

TOBAY from Assignee without further or additional ult Notice received by
notice from TOBAY to Assignor, shall be
deemed a default under the Concession Agreement
thereby triggering the Assignee's right to the
payments set forth in the second to Jast Paragraph
32 of the Concession Agreement as set forth in
Paragraph 2 of the Amendment to Concession Agre
ement dated June _:1_, 20 l 0, upon delivery
to TOBAYofthe Default Notice.
(g) Assignor and TOBAY further expressly agree that TOB

any payments to Assignor under Paragraph 32 AY shall not make
of the Concessio n Agreement, as amended,
whether such payments results from a default by Assi
gnor or the termination of the Concession
Agreement by TOBAY for any reason whatsoever
(i.e., whether or not as a result of a default by
Assignor under the Concession Agreement) prior to
the giving of thirty (30) days written notice
to the Assignee.
(h) The Assignor and TOBAY agree that the terms

Concession Agreement shall not be modjfied in any and provisions of the
way as to materially and adversely affect
Assignee's rights and benefits under this Assignment
without notice to and consent of Assignee.
(NO FUR THE R TEX T ON THIS PAGE)
3
IN' WIT NES S WHE REO F, Assig nor and Assig

nee have exec uted and TOB AY has
countersigned this Assignment.
y: _ _ ____,,,~-.:a--------
Thomas . Gilmartin, Executive Vice
AGREED TO AND ACC EPTE D:
President & Chief Lending Officer
TOWN OF OYSTER BAY
By~~Z~?
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AMHNDMBNT TO CONCESSION AQRBHMENT

New York, having its principal office at Town Hall_. Audrey
Avenue, Oyster Bay, New York 11771 and hereinafter referred to
11
as the "TOWN"; acting for and on behalf of lhe DEPARTMENT
OF PARKS, and hereinafter referred to as the ..DEPARTMENT';
S.llB. CONVENTION & CATERJNO CORP., having its

principlll place of business at 150 Hicksville Road, Bethpage, New
York 11714, hereinafter referred to as the "CONCESSIONAIR".
WITN ESSE TH:

WHEREAS, by Resolution No. 638-2000, adopted on Odobe r 3, 2000 the
parties hereto
11
entered into a Concession agreement (as amended and restated by Agreem

ent dated April J9,
2005 the "Agieement") for the operation of a food and beverage concession
11
at the TOWN OoJf
Course Facility (the "Facility"}, for the period .&om January 1, 2001 through
December 31, 2020,
and to make capital improvements in the amount of $2,097,000 at the Facility
; and
WHEREAS, by Resolution No. 313-2005, adopted on April 19.
2005. the parties
established the value of the capital improvements perfonned to date
at the Facility as being
$4,600,000, and the TOWN exercised the ten-year renewal option contain
ed in the Agreement,
and entered into a revised Agreement with the CONCESSIONAIRE; and
WHEREAS, the CONCESSIONAIRE then made additional capital improv

ements to the
Facmty in excess of $350,000, and proposed to make additional capital improv
ements in the
amount of $3,250,000 to the facility, and in consideration of the new capital
improvements, the
TOWN, by Resolution No. 889-2008, adopted on September 16, 2008, extende
d the Agreement
through Decem ber 31, 2049~ and
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WHEREAS. to facilit~te the completion of the capital improvements the
CONCESSIONAIRE is seeking financing; and
WHEREAS, in order to induce the LENDER (as hereinafter defined) to provide such
financing. and in consideration of the benefits the TOWN has and will continu~ to receive from
the previous and proposed capital improvements, the TOWN has agreed to amend the Agreement
to provide for payment of certain amounts under the Agreement to LENDER should
CONCESSIONAIRE default in its obligations to the LENDER; and
WHEREAS, the TOWN and (he CONCESSIONAIRE wish to funher amend the
capital improvements to the Facility and other matters.
NOW 1HEREFORE, the TOWN and the CONCESSIONAIRE agree as follows:
1. Section 32 of the Agreement shall be renamed "EVENTS OF DEFAULT' and 7

the lead-in parasraph shall be replaced in its entirety with the following:
"Any of the following events shall constitute an Eyent of Default under

this Agreement:"
2. Section 32 of the Agreement shall be further amended by adding the following

subparagraph (h):
"h) The receipt by the Town on written notice (a

uLoan Default Notice") from the Lender of the
occurrence of a default or event of defauh, beyond
any applicable period for grace and cure, under (A)
that certain Promissory Note dated as of October 27,
2011 in the face amount of $7,843,138.08 inclusive
of interest as set forth therein (the "Note") executed
and delivered by CONCESSIONAIRE to NDH
Capital Corporation (~NDH") and/or (B) that
certain Tenn Loan, Pledge and Security Agreement
dated as of October 27, 2011 between
CONCESSIONAIRE and NDH (the "Loan
Agreement" and collectively with the Note and
other financing documents, the "Loan Documents")
(a "Loan Derault"). With respect to any Loan
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Default under this subparagraph (h) of this Section

32 of this Agreement, CONCESSIONAIRE S 7
period of grace and cure shall be controlled by the

Loan Documents, and the 60 day period set forth in
the tbll paragraph foUowing this subparasraph (h)
shall not apply.'~
3. The existing second to last paragraph of Section 32 of the Agreemem Is deleted In

its entirety, and replaced with the following:
"Effective as of the date hereof; and for so long as

the CONCESSIONAIRE shall owe any obligation
to LENDER (hereinafter defined) under the Loan
Documents. the TOWN shall make all amounts
payabJe by the Town under this Section 32 (the
''Termination Payment'" as hereinafter defined) to
NDH (and together with its successors and assigns
"LENDERn), at such address as LENDER shall
notify the TOWN in writing. Notwithstanding
anything to the contrary contained in this
Asreement, and irrespective of any amounts paid by
CONCESSIONAIRE co the TOWN, the status of
the capital improvements or any event of default
hereunder, the parties hereto agrees as follows:
i) . Upon the occurrence of an Event of Default
under subsection (h) or this Section 32 and the
expiration of any applicable grace or cure periods,
CONCESSIONAIRE expressly acknowledges and
agrees that the Agreement shall be deemed
terminated by the Town without further notice to
CONCESSIONAIRE. CONCESSIONAIRE hereby
irrevocably authorizes and jnstructs the TOWN to
pay the Termination Payment to the LENDER, in
one lump sum, within sixty (60) days following
receipt of notice by LENDER to the TOWN of such
Event of Default and the expiration of any
applicable cure periods. The Termination Payment
shall equal the sum of (a) the Prepayment Amount
set forth in the Loan Agreement together with (b)
all other amounts due and to become due under the
Loan Documents, including, but not limited to any
and aJJ late interest, fees, cos:ts, expenses and
attorney's fees which may have accrued from the
date of such default through the date of payment
(the "Default Amount"). The obligation of the
TOWN to make the Tennination Payment shall not
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be subject to any conditions precedent and further

shaU not be subject to any defenses, including but
not limited to, the defense of bankruptcy or
insolvency of tho CONCESSIONAIRE, set off,
counterc;Jaim or recoupment which the TOWN may
have against the CONCESSIONAIRE, for any
reason whatsoever, including any circumstance
whatsoever which might constitute a legal or
equitable discharge or defense of the TOWN.
ii) In the event the TOWN tenninates this
Agreement prior to December 31, 2025 whether
resulting from an event of default as set forth in
subsection (a) through (g) of this Section 32 by
CONCESSIONAIRE or otherwise, (beyond the
expiraifon of applicable grace and cure periods),
CONCESSIONAIRE hereby irrevocably authorizes
arid instructs the TOWN to pay the Termination
Payment due under this Agreement to LENDER to
satisfy in full all of CONCESSIONAIRE'S
obligations to LENDER. The TOWN shall make
the payments to the LENDER within sixty (60) days
of the date of such termination. Said tennination
payment shall be calculated by multiplying (A) S%
of the total capital improvements made to the
Facility by the CONCESSIONAIRE calculated as
of the date of termination, by (B) the number of-
years, or part of a year, remaining in the initial tenn
of this Agreement, including any remaining renewal
options, but in no event to exceed 100% of the
value of said improvements (the ,ccause
Termination Payment").
iii) "Termination Payment'' shall mean
collectively, the Cause Tmnination Payment and
the Default Amount (as such ternJS are de.fined in
the .Agreement as amended by this Amendment).
Further, upon payment in full of the Termination
Payment by the Town in accordance with the tenns
of this Section 32, (]) the Town will have purchased
al) risht, tide and interest of the
CONCESSIONAIRE in and to the capital
improvements made by the CONCESSIONAIRE to
the Facility and aJI machinery, equipment, furniture,
fi,crures, materials and other property of
CONCESSIONAIRE located at or used in . the
connection with the operation of the Facility (the
~'Purchased Property"), and (ll) any and all
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security interests, liens or encumbrances in the

Purchased Property in favor of the Lender, if any,
shall be released, satisfied and/or tenninated by the
Lender.
iv) Each of CONCESSIONAIRE and Harendra
Singh have executed and delivered to the TOWN a
certain General Release and Covenant Not to Sue
(the "Release"'), a copy of which is attached hereto
as ExJul>it A The Release shall be held in escrow
by the TOWN's Town Attorney, and shall be
delivered to the TOWN if the TOWN is required to
pay the Termination Payment or any other payment
hereunder to any party other than the
CONCESSIONAIRE hereunder. If the TOWN is
not required to make a Termination Payment or any
other payment hereunder prior to the Loan
Satisfaction Date. the Release shall be promptly
returned to CONCESSIONAIRE and Harendra
Singh.
v) After December 31, 2025 or the date on
which the TOWN receives written notice from
LENDER that aU obligations of the
CONCESSIONAIRE to the LENDER are fully
paid, whichever comes first (the "Loan
Satisfaction Date"), if the TOWN terminates this
Agreement for any reason other than the default of
the CONCESSIONAIRE, the TOWN shall pay to
the CONCESSIONAIRE the applicable
Tennination Payment.
4. CONCESSIONAIRE has assigned all of its rights to payments by the TOWN

under the Agreement as am~nded by this Amendment to LENDER pursuant to an Assignment of
Concession Agreement Proceeds dated as of November 18, 2011 (the "Assignment"). The
TOWN acknowledges LENDER's rights under the Assignment and the LENDER's sewrity
interest under the payments due under the Agreement and irrevocably agrees to pay the Payment
Amounts (as such tenn is defined in the Assignment) in accordance with the instructions set
forth in Exhibit A to the Assignment (or such other instructions as LENDER may provide to the
TOWN from time to time).
5. For purposes of calculation of the Cause Termination Payment pursuant to

Section 32(ii) of the Agreement, as amended hereby, the TOWN and CONCESSIONAIRE each
confinns that the aggregate value of the capital improvements as of the date hereof are
$10,000,000.00 and the TOWN and CONCESSIONAIRE shall provide LENDER with an update
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of trus amount at least once per year and upon request by LENDER until all amounts due and
owing under the Loan Doewnents are paid in full.
6. In accordance with the Assignment and Section 32 of the Agreement as amended

by this Amendment, the CONCESSIONAIRE hereby assigns to and designates the LEND~ as
the financing entity entitled to receive amounts payable from the TOWN, pursuant to Section 32
of the Agreement. The TOWN hereby consents to said assignment and any future assignment of
the payment rights to a LENDER, and said consent shall be deemed to comply with tho
provisions of Section 32 of the Agreement.
7. The TOWN acknowledses that pursuant to the Assignment and Section 35 of tho
Agreement as amended by this Amendment, LENDER, is the assignee of the rights to receive all
paym~ts from the TOWN under the Agreement as a.mended by this Amendment (and only those
right~, including, but not limited to the Tennination Payment and as such, LENDER. is not
obligated to assume any obligation of CONCESSIONAIRE, including, but not limited to the
obligation to operate the food and beverage service.
8. A, of the date hereo( each of the TOWN and CONCESSIONAIRE confinns, for
the benefit of the LENDER, that no event of default has occwred and is continuing under the
Agreement.
9. Except as set forth in this Amendment, the parties hereby agree that all remaining
tenns of the Agreement shall remain in full force and effect.
(End of text. Signatures appear on the following page.]
ME:L l224f.)i87v.S
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IN WITNESS WHEREOF, S.R.B. CONVENTION AND CATERING CORP. and the
TOWN OF OYSTER BAY have executed this Amendment to the Agreement on the dates
indicated below.
TOWN OF OYSTER l .
By.~~
Name:
Tade: Supa .,isa1 , ~ A-~~'-\
Date Signed: as ofNovember 18, 2011
Reviewed and approved by:
Deputy Town Aticmey
By: _ _ _ _PIIPP-I,....__ _ _ __
Name: Haren
Title: President
Date Signed: as of November 18, 2011
Harendra Si
Mel 12240".'it'fv. 5
~
.---.. 78 of 255 PageID #: 1719
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STATE OF NEW YORK)

) ss.;
COUNfY OF NASSAU)
On this ~ day of November. 2011, before me personally came
_L___ea_li_OJC_~_J....en
__Q\/;_~
_ _ _ _ _ _ _ _ _.. to me kno~ who. being by me duly
sworn. did depose and say that he/she resides at / 0(.3 Rllho.(d P/OU, 117{(s,s~o.Jd- Portr-,,
N\/ It 1/tJ
that he/she is the ]p(,LJQ Attoro<:+( of the Town of Oyster Bay, the municip11l
corporation described herein and which executed the foregoing instrument; that he/she knows the
seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was
so affixed by order of the Town Board of said corporation, and that he/she signed his/her name
thereto by like order.

SHEILA TARNOWSKI
NOTARY PUBLICSTATE OF NEW YORK
No. 01TA6174699
Qualified tn Nassau county
MV comm1111on e,cp1re1 leptember 14, 201.5"
STATE OF NEW YORK)

) ss.:
COUNrY OF NASSAU )
On thls /&q,1. day of November 2011, before me personally came HARENDRA

11
SINGH to me knowg, who, being b_y me _du!)r swyr;n, did depose and say that he/she resides at
-s{I) ~ l - J ~ ~ ~e.-Jc..J
fMf.1,.;~ cltrJ ~ rJ Y /(
'J 'f/ that he/she is the President of
S.R.B. CONVENTION & CATERING CORP, and has authority to sign on behalf of said
corporation, described in and which executed the foregoing instrument, that he/she knows the seal
of said corporation; that the seal affi"ed to said instrwnent by order of the Board of Directors of
sajd corporation is said corporate seal and that he/silt

I
HOWARD KURTZBERG
Notary Public, State of New Yo
No.02KU4787833
Qualified io Nassau Coun!Y t~
Commission Explres Sept. 30, 20 -
H1 1224J707 v. 5
~
~
79 of 255 PageID #: 1720
Case 2:16-cv-04013-SJF-, ,,,T Document 4-6 Filed 07/27/16 , ..1ge 10 of 11 PagelD #: 259
Euiblt A
Geaenl Release or all Liability
S.R.B. Convention & Catering Corp. and Harendra Si~ for themselves and each of
their affiliates, and their respective, successors and assigns (collectively, "Releasing Parties"), in
consideration of a payment from Town of Oyster Bay in connection with rhe termination of a
certain Concession Agreement dated April 19, 2005, as amended by Resolution No. 313-2005,
adopted on April 19, 2005, further ameaded by Resolution No. 889-2008, adopted on September
16, 2008, and further amended by Amendment to Concession Agreement dated as of November
1s. 2011 (collectively, the "Concession Agreement"), hereby irrevocably releases, waives and
forever
. discharges the Town of Oyster Bay, its elected .and appointed officials,
. and its employees,
agents and attorneys (collectively, "Released Parties"), from all actio~ causes of action, suits,
debut sums of money, accounts, invoices, contracts, coatroversies, agreements, promises,
variances, trespas3es_ damages, judgments. extents, executions, claims, and demands, in law or
equity, which any one or more of the Releasing Parties ever had, now have or may have had
against any one or more of the ~eased Parties for any rcaso~ from the beginning of the world to
term of this Release and that the payment made by the Town of Oyster Bay in connection with
None of the Releasing Parties shalt institute any action or proceeding, at law or in equity,
against any Released Party, nor institute, prosecute or in any way assist, cooperate "ith or
Ml=:l 12240187v.5
~.
Document 80 Filed 08/28/17 ~
Page 80 of 255 PageID #: 1721
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or cause of action for damages, costs, loss of services, expenses, or compensation for or on
out of the termination of the Concession Agreement.
warrants and represents to the Released Parties that it has full right and authority to execute this
Release for itself and on behalf of the other Releasing Parties.
Dated: u of November 18, 2011
STATE OF NEW YORK ) ss.:
COUNTY OF NASSAU )
Jt'.'.
On the 1'12- day ofNovember in the year 20 I I. before me, the undersiped, personally appeared
Harendra Singh, personally known to me or proved to me on the basis of sa1isfactory evidence to
be the individual(s) whose name(s) is (arc) subsc;ribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their/ capacity (ies), that by
his/her/their signature(s) on the instrument, the iadividual(s). or the person upon behalf of which
the individual(s) acted, executed tfl..e instrument, and that such individual made such appearance
before the undenigned in the \ kn ~ ~ Y.
(Insert the city or other political subdivision and
the state or country or other place the ac wledgment was taken).
HOWARD KURTZBERG
Notary Public, State of New York
No.02KU4787633
Qualified in Nassau County/ 2
Commission Expires Sept. 30, 20 ~
~,e 1 122 -1 o1 0 1 ,, s
AMENDM ENT TO CONCESSION AGREEME NT

Avenue, Oyster Bay, New York 11771, and hereinafter referred to
as the "TOWN"; acting for and on behalf of the DEPARTMENT
OF PARKS, and hereinafter referred to as the "DEPARTM ENT';
SRB CONCESS ION INC., having its principal place of business at

150 Hicksville Road, Bethpage, New York 11714, hereinafter
referred to as the "CONCESSIONAIRE".
WITNES SETH:
WHEREAS, by Resolution No. 312-2005, adopted on April 19, 2005, the parties hereto
entered into a concession Agreement dated April 19, 2005 (as amended by Agreement dated
September 16, 2008, collectively, the "Agreement") for the operation of a food and beverage
concession at the TOBAY Beach and Marina facility (the "Beach Facility"), for the period from
May 1, 2005 through April 30, 2045 (as extended), and to make capital improvements in the total
amount of$3,500,0 00 at the Beach Facility; and
WHEREAS, by Resolution No. 887-2008, Adopted on September 16, 2008, the parties
acknowledged that CONCESSIONAIRE had completed capital improvements of up to
$751,637.50, and the TOWN exercised the two ten-year renewal options contained in the
Agreement in return for Concessionaire's agreement to make an additional $2,500,000.00 in
improvements to the Beach Facility, and the parties executed an Agreement dated September 16,
2008, memorializing the same; and
WHEREAS, CONCESSIONAIRE has made improvements to the Beach Facility to date
and proposes to make additional improvements so that the total of all improvements exceeds
$12,500,000.00 in the aggregate; and
MEl 13001579v.2
NDH000377
WHEREAS , to facilitate the completion of the capital improvements at the Beach
Facility, the CONCESS IONAIRE is seeking financing; and
WHEREAS , in order to induce the LENDER (as hereinafter defined) to provide such
financing, and in considerati on of the benefits the TOWN has and will continue to receive from
the previous and proposed capital improvements, the TOWN has agreed to amend the Agreement
to provide for payment of certain amounts under the Agreement to LENDER should
CONCESS IONAIRE default in its obligations to the LENDER; and
WHEREAS , the TOWN and the CONCESS IONAIRE wish to further amend the
Agreement in connection with the CONCESS IONAIRE'S obtaining financing for the required
capital improveme nts to the Facility and other matters.
NOW THEREFO RE, the TOWN and the CONCESS IONAIRE agree as follows:
1. Section 32 of the Agreement shall be renamed "EVENTS OF DEFAULT'', and

the lead-in paragraph shall be replaced in its entirety with the following:
"Any of the following events shall constitute an Event of Default under

this Agreement :"
2.- Section 32 of the Agreement shall be further amended by adding the following
subparagra ph (i):
"i) The receipt by the Town of written notice (a

"Loan Default Notice") from the Lender of the
occurrence of a default or event of default
(including, without limitation a default or event of
default under that certain Term Loan, Pledge and
Security Agreement dated as of November 18, 2011
between S.R.B. Convention and Catering Corp. and
NOH Capital Corporation and the Negotiable
Promissory" Note executed pursuant thereto),
beyond any applicable period for grace and cure,
under (A) that certain Promissory Note dated June
22, 2012 (the "Note executed and delivered by
0
)
CONCESS ION AIRE to NOH Capital Corporatio n
MEl 13O01579v.2
NDH000378
("NDH") and/or (B) that certain Term Loan, Pledge

and Security Agreement dated as of June 22, 2012
(the "Loan Agreement" and collectively with the
Nole and other financing documents, Lhe "Loan
Documents") between CONCESSIONAIRE and
NDH (a "Loan Default"). With respect to any
Loan Default under this subparagraph (i) of this
Section 32 of this Agreement,
CONCESSIONAIRE'S period of grace and cure
shall be controlled by the Loan Documents, and the
sixty (60) day period set forth in the full paragraph
following this subparagraph (i) shall not apply.,,
3. The existing second to last paragraph of Section 32 of the Agreement is deleted in

its entirety, and replaced with the following:
"Effective as of the date hereof, and for so long as .

the CONCESSIONAIRE shall owe any obligation
to LENDER (hereinafter defined) under the Loan
Documents, the TOWN shall make all amounts
payable by the Town under this Section 32 (the
"Termination Payment" as hereinafter defined) to
NDH (and together with its successors and assigns
"LENDER"), at such address as LENDER shall
notify the TOWN in writing. Notwithstanding
anything : to the contrary contained in this
Agreement, and irrespective of any amounts paid by
CONCESSIONAIRE to the TOWN, the status of
the capital improvements or any event of default
hereunder, the parties hereto agree as follows:
(1) Upon the occurrence of an Event of Default
under subsection (i) of this Section 32 and the
expiration of any applicable grace or cure periods,
CONCESSIONAIRE expressly acknowledges and
agrees that the Agreement shall be deemed
terminated by the Town without further notice to
CONCESSIONAIRE. CONCESSIONAIRE hereby
irrevocably authorizes and instructs the TOWN to
pay the Termination Payment to the LENDER, in
one lump sum, within sixty (60) days following
receipt of notice by LENDER to the TOWN of such
Event of Default and the expiration of any
applicable cure periods. The Termination Payment
shall equal the sum of (a) the Prepayment Amount
set forth in the Loan Agreement together with (b)
all other amounts due and to become due under the
MEl 13001579v.2
NDH000379
Loan Documents, including, but not limited to any

and all late interest, fees, costs, expenses and
attorney's fees which may have accrued from the
date of such default through the date of payment
(the "Default Amount"). The obligation of the
TOWN to make the Tennination Payment shall not
be subject to any conditions precedent and further
shall not be subject to any defenses, including but
not limited to, the defense of bankruptcy or
insolvency of the CONCESSIONAIRE, set off,
counterclaim or recoupment which the TOWN may
have against the CONCESSIONAIRE, for any
reason whatsoever, including any circumstance
whatsoever which might constitute a legal or
equitable discharge or defense of the TOWN.
(2) In the event the TOWN terminates this
Agreement prior to March 15, 2029 whether
resulting from an event of default as set forth in
subsection (a) through (h) of this Section 32 by
CONCESSIONAIRE or otheiwise, (beyond the
expiration of applicable grace and cure periods),
including, without limitation as contemplated by
-. Sections 25 and 30 of the Agreement,
CONCESSIONAIRE hereby irrevocably authorizes
and instructs the TOWN to pay the Termination
Payment due under this Agreement to LENDER to
satisfy in full all of CONCESS I0NAIRE'S
obligations to LENDER. The TOWN shall make
the payments to the LENDER within sixty (60) days
of the date of such termination. Said termination
payment shall be an amount equal to the greater of
(1) the Default Amount or (2) the product of (A) 5%
of the total aggregate value of capital improvements
made to the Facility by the CONCESSIONAIRE
calculated as of the date of tennination, multiplied
by (B) the number of years, or part of a year,
including any remaining renewal options, but in no
event to exceed 100% of the value of said
improvements (the "Cause Termination
Payment").
(3) "Termination Payment" shall mean
collectively, the Cause Termination Payment and
the Default Amount (as such terms are defined in
the Agreement as amended by this Amendment)
and shall never be less than the Default Amount or
MEl 13001579v.2
NDH000380
more than the greater of either of (a) the Cause

Termination Payment or (b) the Default Amount.
Further, upon payment in full of the Termination
Payment by the Town in accordance with the terms
of this Section 32, (a) the Town will have purchased
all right, title and interest of the
CONCESSIONAIR E in and to the capital
improvements made by the CONCESSIONAIR E to
the Facility and all machinery, equipment, furniture,
fixtures, materials and other property of
CONCESSIONAIR E located at or used in the
connection with the operation of the Facility (the
"Purchased Property"), and (b) any and all
security interests, liens or encumbrances in the
Purchased Property in favor of the Lender, if any,
shall be released, satisfied and/or terminated by the
Lender.
(4) Each of CONCESSION AIRE and Harendra
Singh have executed and delivered to the TOWN a
certain General Release and Covenant Not to Sue
(the "Release"), a copy of which is attached hereto
as Exhibit A. The Release shall be held in escrow
by the TOWN's Town Attorney, and shall be
delivered to the TOWN if the TOWN is required to
pay the Termination Payment or any other payment
hereunder to any party other than the
CONCESSIONAIR E hereunder. If the TOWN is
not required to make a Termination Payment or any
other payment hereunder prior to the Loan
Satisfaction Date, the Release shall be promptly
returned to CONCESSIONAIR E and Harendra
Singh.
(5) After August 22, 2029 or the date on which
the TOWN receives written notice from LENDER
that all obligations of the CONCESSIONAIR E to
the LENDER are fully paid, whichever comes first
(the ''Loan Satisfaction Date"), if the TOWN
terminates this Agreement for any reason other than
the default of the CONCESSIONAIR E, the TOWN
shall pay to the CONCESSIONAIR E the applicable
Termination Payment.
4. CONCESSIONAIR E has assigned all of its rights to payments by the TOWN

under the Agreement as amended by this Amendment to LENDER pursuant to an Assignment of
MEl l3001579v.2
NDH000381
Concession Agreement Proceeds dated as of June 22, 2012 (the "Assignment"). The TOWN
acknowledges LENDER's rights under the Assignment and the LENDER's security interest
under the payments due under the Agreement and irrevocably agrees to pay the Payment
Amounts (as such term is defined in the Assignment) in accordance with the instructions set
forth in Exhibit A to the Assignment (or such other instructions as LENDER may provide to the
TOWN from time to time in writing).
5. The TOWN and CONCESSIONAIRE shall provide LENDER with an update of

the aggregate value of the capital improvements at least once per year and upon request by
LENDER until all amounts due and owing under the Loan Documents are paid in full.
6. In accordance with the Assignment and Section 32 of the Agreement as amended

by this Amendment, the CONCESSIONAIRE hereby assigns to and designates the LENDER, as
the financing entity entitled to receive amounts payable from the TOWN, pursuant to Section 32
of the Agreement. The TOWN hereby consents to said assignment and any future assignment of
the payment rights to a LENDER, and said consent shall be deemed to comply with the
provisions of Section 32 of the Agreement.
7. The TOWN acknowledges that pursuant to the Assignment and Section 35 of the
Agreement as amended by this Amendment, LENDER, is the assignee of the rights to receive all
payments from the TOWN under the Agreement as amended by this Amendment (and only those
rights), including, but not limited to the Termination Payment and as such, LENDER is not
- obligated to assume any obligation of CONCESSIONAIRE, including, but not limited to the
obligation to operate the food and beverage service.
8. As of the date hereof, each of the TOWN and CONCESSIONAIRE confirms, for
the benefit of the LENDER, that no event of default has occurred and is continuing under the
Agreement.
9. The TOWN hereby confirms that, as per the September 16, 2008 agreement, the
term of the Agr~ement has been extended through and including April 30, 2045.
Except as set forth in this Amendment, the parties hereby agree that all remaining terms of the
Agreement shall remain in full force and effect.
[End of text. Signatures appear on the following page.]
MEl 1300l579v.2
NDH000382
IN WITNESS WHEREOF, SRB CONCESSION INC. and the TOWN OF OYSTER
TOWN OF OYSTER BA''!t
By~.. .._Ci 'A,_~ ----~- ---

Name: Leol)Cft'c/ GetJl)'/a.
Title: Town Attorney /
Date Signed: as of June _J_, 2012
~ C ~~
SRB CONCESSION INC.
By: _ _ _ _ _ _ _ _ _ _ _ __
Name: Harendra Singh
. Title: President
Date Signed: as of June~ 2012
Agreed as to paragraph 3 hereof:
Harendra Singh
MEl 13001579v .2
NDH000383
STATE OF NEW YORK )

) ss.:
COUN TY OF NASS AU)
On this (~ ,& day of June, 2012, before me personally came

___ __k--a---'-~~,_(Xl-"'tt:..-.~....__--&--='--'--"Cv~---(.,\------' to me known, who, being by me duly
sworn. did depose and say that he/she resides at I':::\ ~ '.:i?-da1-d Bice. /YJa s ~ N'(
that he/she is the 1)J ,\I) --kt\':l?LJ of the Town of Oyster Bay, the municipal
corporation described herein and which executed the foregoing instrument; that he/she
knows the
seal of said corporation; that the seal afflxed to said instrument is such corporate seal;
that it was
so affixed by order of the Town Board of said corporation and that he/she signed his/her
11 name
L6
'
~
Notary Public
STATE OF NEW YORK )

DONNA 8. IWANSON
Notary Public, State of New
No.02SW6193769
Y
Qualified In Nassau Count,_. , ~
) ss.: Commission Expires October 20, ~
COUN TY OF NASSAU )
On this _ _ _ day of June, 2012, before me personally came HARENDRA SINGH

to
me known, who, being by me duly sworn, did depose and say that he/
she resides at
_____________________ _,
that he/she is the President of
SRB CONCESSION INC., and has authority to sign on behalf of said corporation,
described in
and which executed the foregoing instrument, that he/she knows the seal of said corpora
tion; that
the seal affixed to said instrument by order of the Board of Directors of said corpora
tion is said
corporate seal and that he/she signed his/her name thereto by like order.
Notary Public
M1 1300157 9v.2
NDH000384
IN WITNESS WHEREOF, SRB CONCESSION INC. and the TOWN OF OYSTER
TOWN OF OYSTER BAY
By: _ _ _ _ _ _ _ _ _ _ __
Name:
Title: Supervisor
Date Signed: as of June_, 2012
SRB CONCESSION INC.
By:~
--. Name:~
Title: President
Date Signed: as of June .,__'L, 2012
MEl 13001579v.2
NDH000385
STATE OF NEW YORK)

) ss.:
COUNTY OF NASSAU )
On this day of June, 2012, before me personally came
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _, to me known, who, being by me duly
sworn, did depose and say that he/she resides at _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __,
that he/she is the _ _ _ _ _ _ _ _ _ _ _ of the Town of Oyster Bay, the municipal
corporation described he~ein and which executed the foregoing instrument; that he/she knows the
seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was
so affixed by order of the Town Board of said corporation, and that he/she signed his/her name
Notary Public
STATE OF NEW YORK)

) ss.:
COUNTY OF NASSAU )
,_J
On this _ _ _ day of June, 2012, before me personally came HARENDRA SINGH to
me known, who, being by me duly sworn, did depose and say that he/she resides at
______________
VN r,t-\ r/;4 l ~ ______________
AJ L-f I _ _,
that he/she is the President of
SRB CONCESSION INC., and has authority to sign on behalf of said corporation, described in
and which executed the foregoing instrument, that he/she knows the seal of said corporation; that
the seal .affixed to said instrument by order of the Board of Directors of said corporation is said
corporate seal and that he/she signed his/her name thereto by like order.
~
MEl 13001579V.2
NDH000386
Exhibit A
General Release of all Liability
SRB CONCESSION INC. and Harendra Singh, for themselves and each of their affiliates,
and their respective, successors and assigns (collectively, "Releasing Parties"), in consideration
of a payment from Town of Oyster Bay in connection with the termination of a certain
Concession Agreement dated April 19, 2005, as amended by Resolution No. 887-2008, adopted
on September 16, 2008 and the Amendment to Concession Agreement dated as of June _ ,
2012 (collectively, the "Concession Agreement"), hereby irrevocably releases, waives and
forever discharges the Town of Oyster Bay, its elected and appointed officials, and its employees,
agents and attorneys (collectively, "Released Parties"), from all actions, causes of action, suits,
debts, sums of money, accounts, invoices, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, claims, and demands, in law or
equity, which any one or more of the Releasing Parties ever had, now have or may have had
against any one or more of the Released Parties for any reason, from the beginning of the world to
term of this Release and that the payment made by the Town of Oyster Bay in connection with
None of the Releasing Parties shall institute any action or proceeding, at law or in equity,
against any Released Party, nor institute, prosecute or in any way assist, cooperate with or
or cause of action for damages, costs, loss of services, expenses, or compensation for or on
MEl 13001579v. 2
NDH000387
out of the terminati on of the Concession Agreement.
warrants and represent s to the Released Parties that it has full right and authority to execute this
Release for itself and on behalf of the other Releasing Parties.
Dated: as of June ~~2012 SRB CONCES SION
Harendra Singh
STATE OF NEW YORK ) ss.:
COUNTY OF NASSAU )
On the ~ day of June in the year 2012, before me, the undersign ed, personall y appeared
Harendra Singh, personall y known to me or proved to me on the basis of satisfacto ry evidence to
be the individua l(s) whose name(s) is (are) subscribed to the within instrument and
acknowle dged to me that he/she/they executed the same in his/her/th eir/ capacity (ies), that by
his/her/th eir signature (s) on the instrument, the individual(s), or the person upon behalf of which
the individua l(s) acted, executed the instrument, and that such individual made such appearance
before the undersign ed in the U::VM"-1 o-r-J"r'-h-J. (Insert the city or other political subdivisio n and
the state or country or other place the acknowledgment was taken).
~ceofi
talcing acknowle dgment.)
MEl 13001579v .2
NDH000388
,--.. Document 80 Filed 08/28/17 Page 95 of 255 PageID #: 1736
Case 2:16-cv-04013-SJF-.. ,,T Document 16-2 Filed 12/29/16 t->age 2 of 60 PagelD #: 354
NELSON CORREA
Page 1
1 SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NASSAU
2 ---------------------------------------------------------x
3 In the Matter of the C1aim of
4 PHOENIX LIFE :INSURANCE COMPANY and PHL VARIABLE :INSURANCE
COMPANY,
5
6
- against -
7
THE TOWN OF OYSTER BAY,

8
9 ---------------------------------------------------------x
10
Ju1y 12, 2016
11 10: 12 a.m.
12
13 DEPOSITION of NELSON CORREA, on beha1f of Phoenix
14 Life :Insurance Company, pursuant to Section S0H of the
15 Genera1 Municipa1 Law, he1d at the offices of he1d at the
16 offices of Quinn Emanue1 Urquhart & Su11ivan, LLP, 1ocated
17 at 51 Madison Avenue, New York, New York 10010, before
18 Anthony Giarro, a Registered Professiona1 Reporter and a
19 Notary Pub1ic of the State of New York.
20
21
22
23
24
25
Veritext Legal Solutions

212-267-6868 www.veritext.com 516-608-2400
~ 96 of 255 PageID #: 1737
~
Case 2:16-cv-04013-SJF-.. ,T Document 16-2 Filed 12/29/16 rage 3 of 60 PagelD #: 355
NELSON CORREA
Page 2 Page4
I APPEARANCES: A lam.
2
3 LOCK LORD LLP
2 Q Who is here to represent you as outside
Attorneys for Phoenix Lite Insurance Company 3 counsel?
4 20 Church Street 4 A Outside counsel is Donald Frechette of Locke
Hartford. Connecticut 06103
5 Lord.
5
BY: DONALD E. FRECHETTE. ESQ.
6 Q Where do you reside?
6 7 A l reside in Glastonbury. Connecticut.
7 QUINN EMANUEL URQUHART & SULLIVAN. LLP 8 Q Where are you employed?
Attorneys for The Town of Oyster Bay
9 A I'm employed at Phoenix Life Insurance Company
8 51 Madison Avenue. 22nd Floor
New York. New York 10010 IO in Hartford. Connecticut.
9 11 Q What is your position at Phoenix Lite?
BY: JONATHAN E. PICKHARDT. ESQ 12 A I'm senior managing director of the private
10
II 13 placement investment group. I co-head the group.
12 Also Present: Joseph Tedone. Esq . in-house counsel for 14 Q Private placement group: is that what you
Phoenix 15 said?
13
16 A Private placement investments.
14
15 17 Q How long have you been in that role?
16 18 A 30 years.
17 19 Q ls that how long you've been at Phoenix Life?
18
19 20 A Yes. 30 years.
20 21 Q In that whole time. you've been head of the
21 22 private placement investment group?
22
23 A No. I've been in the investment group for 30
23
24 24 years. I've been head of the group since 2003.
25 25 Q What is the private placement investment
Page 3 Page 5
(A atlinnation was pre-marked as 50(h) I group?
2 Exhibit I for identification as of this date.) 2 A We invest assets for Phoenix Life Insurance
3 N E L S O N C O R R E A atler having first been duly 3 Company. And those assets are corporate bonds, mezzanine
4 sworn by a Notary Public of the State of New York. was 4 and private equity investments.
5 examined and testified as follows: 5 Q You understand that you are here today in
6 BY THE COURT REPORTER: 6 connection with a claim that has been served by Phoenix on
7 Q Please state your name for the record. 7 the Town of Oyster Bay in connection with some loans that
8 A Nelson Correa. 8 were extended by Phoenix?
9 Q What is your present work address? 9 A Yes.
10 A 1 American Row. Hartford. Connecticut 06102. Qto Were those loans extended as part of the
11 EXAMINATION BY 11 private placement investment group?
12 MR. PICKHARDT: 12 A They were. I would classify them.
13 Q Good morning. Mr. Correa. My name is John 13 MR. FRECHETTE: To be clear. the loans were
14 Pickhardt. We've met before. But I'll introduce myself on 14 actually extended by different entities. So maybe if
15 the record. I am counsel to the Town of Oyster Bay. Do 15 we have some understanding of what you mean when you
16 you understand that you are here today in connection with a 16 say "Phoenix." that might be helpful.
17 hearing that is being held under Section 50(h) of the New 17 Q We'll get into greater detail so you can
18 York Municipal Law? 18 explain to me exactly Phoenix Life's role and what other
19 A Yes. 19 entities or other affiliates or third-parties were involved
20 Q Do you understand that you are under oath and 20 in connection with the loans that are the subject of the
21 are obligated to provide truthful testimony to my questions 21 dispute.
22 in the same way that you would if you were sining in a 22 I'm going to provide to you a document that
23 courtroom in front of a jury? 23 has been marked as 50(h) Exhibit I. Do you recognize this
24 A Yes. 24 document?
25 Q Are you represented by counsel here today? 25 A I do.
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Q Do you recognize it as the amended notice of I Q If I refer to those as the S.R.B. entities
2 claim that was submitted by Phoenix Life Insurance Company 2 over the course of the day. will you know what I'm
3 and PHL Variable Insurance Company to the Town of Oyster 3 referring to?
4 Bay? 4 A Yes.
5 A Yeah. I do. 5 Q And you understand that S.R.B. Concession.
6 Q If you would turn to page 4 of the amended 6 Inc. has a license agreement or a concession with the Town
7 notice of claim. is that your signature that appears on the 7 of Oyster Bay to operate concessions at Tobay Beach area in
8 verification on that page? 8 Oyster Bay?
9 A Yes, it is. 9 A (No response given.)
10 Q And it's a fact that you verified the contents 10 Q I'm happy to represent to you that S.R.B.
11 of the amended notice of claim as being true as to the best 11 Concession is the one that has the concessions at Tobay
12 of your knowledge and belief? 12 Beach.
13 A Yes. 13 A Yes. That's the second concession.
14 Q Is the information that is in the amended 14 Q And S.R.B. Convention & Catering Corp. holds
15 notice of claim information that you were already 15 the license and concession agreement for the Town of Oyster
16 knowledgeable of at the time that you provided the 16 Bay for the concessions at the Woodland's Golf Course?
17 certification or did you have to do an investigation in 17 A Yes.
18 order to educate yourself as to the substance'? 18 Q Over the course of the day. again. if I'm
19 A I'm not sure I understand that question. 19 referring to the S.R.B. entities. I will try to refer to
20 Q Did you have direct responsibility or direct 20 them as the S.R.B. entities. so you know I'm talking about
21 involvement in regard to the matters that are described in 21 both entities. If I'm specifying one or the other. I'm
22 the amended notice of claim or did somebody else educate 22 going to try and use S.R.B. Concessions to refer to the
23 you as to them. so that you were able to provide the 23 entity that has the concessions at Tobay Beach and S.R.B.
24 certification? 24 Convention as the entity that has the concession at the
25 A Some of the information. I provided. So I'm 25 Woodlands Golf Course.
Page 7 Page 9
familiar with it. Ifat any point you are confused or need me to
2 Q Did you have any involvement with respect to 2 clarify which entity or which set of concessions we're
3 the preparation of the amended notice of claim beyond 3 discussing. will you please ask me to clarify''
4 providing the certification? 4 A lwill.
5 MR. FRECHETTE: Objection as to form. You can 5 Q There are two different entities that are
6 go ahead and answer. 6 identified as claimants: Phoenix Life Insurance Company
7 A I provided the numbers. 7 and PHL Variable Insurance Company. What are the
8 Q Which numbers did you provide? 8 respective roles of those two entities with respect to this
9 A Some of the references for the payments v.hich 9 claim?
IO were part of our amortization schedules. So I just checked 10 A They are the entities under the Phoenix
11 them for accuracy. 11 corporate umbrella that made the loans. They're both
12 Q Are you reterring to the letters that are 12 atliliates of Phoenix companies.
13 attached to the amended notice of claim that are directed 13 Q Did one of them extend the loan to one of the
14 to S.R.B. Concession. Inc. and S.R.B. Convention & Catering 14 concessionaires and the other one extend the loan to the
15 Corp.? 15 other concessionaire?
16 A I am. So in reference to the original dollar 16 A I actually don't -- I don't know the answer to
17 amounts for notes. the monthly payment amounts that are on 17 that question. Well. one made a loan and then the other
18 this page 2 of one of the documents. 73529. just what 18 one made a loan. But sometimes we split. like one company
19 amounts were due to bring the defaults current. 19 may perhaps split the Woodlands loan. And one company may
20 Q By the way. I made reference to a couple of 20 split the beach loan. But I don't know if that was the
21 addressees on these letters: S.R.B. Concession. Inc. and 21 case here. I'd have to go back and check that.
22 S.R.B. Convention & Catering Corp. Do you understand those 22 Q You are employed by Phoenix Lite Insurance
23 to be obligors on loans that are held by Phoenix or its 23 Company; is that correct')
24 atliliates? 24 A Yes.
25 A Yes. 25 Q Do you have any role at PHL Variable Insurance
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Company? I this is a limited scope examination.
2 A It's the same role. We invest for all the 2 MR. PICKHARDT: I understand that. This is
3 Phoenix affiliates. They're just different portfolios. 3 just context for my understanding with respect to this
4 Q So if I over the course of the day reter to 4 transaction
5 Phoenix. will you understand that I'm referring to Phoenix. 5 MR. FRECHETTE: Understood.
6 meaning Phoenix inclusive of Phoenix Life Insurance Company 6 MR. PICKHARDT: which we'll be getting
7 and PHL Variable Insurance Company? 7 into.
8 A Yes. 8 MR. FRECHETTE: Understood.
9 Q If at any point it's important for purposes of 9 A Can you start that again? Oh. you want me to
10 answering my question or understanding my question to IO explain what a credit-tenant lease is?
11 differentiate between those two. will you please do so? II Q Yes.
12 A Yes. 12 A So it would be - let's say a town owned a
13 Q And are you here today to provide information 13 facility or an otlice building or they wanted to lease
14 with respect to Phoenix overall as opposed to just one of 14 space in an otlice building. we would finance that building
15 those two entities'l 15 for the town. then the town would be on the hook to pay a
16 A lam. 16 lease over a period of. say. 15 years.
17 Q You indicated that the private placement 17 Q So that's an instance where the town is the
18 investment group -- is there a shorthand for that that 18 primary obligor: is that correct?
19 would be helpful for me to use? 19 A Right.
20 A You could just call it the investment group. 20 Q Has the investment group made any investments
21 Q You said the investment group is responsible 21 or extended financing. to your knowledge. where a
22 for investing assets in a variety of types of investments. 22 municipality was a secondary obligor?
23 is that correct? 23 MR. FRECHETTE: Objection.
24 A That is correct. 24 A No.
25 Q Does the investment group lend to 25 Q So is it correct that the loans that are at
Page 11 Page 13
municipalities? issue in the amended notice of claim are the only
2 A Generally speaking. we do but not to any great 2 investments that Phoenix has made or Phoenix understood a
3 extent. 3 municipality to be a secondary obligor on the loan?
4 Q Does the investment group lend to 4 MR. FRECHETTE: I'm going to object. What do
5 municipalities in New York? 5 you mean by "secondary obligor?" Secondary obligation?
6 A No. 6 Q ls that a term you understand?
7 Q Other than the loans that are at issue in this 7 A I'd like to hear your perspective on what you
8 notice of claim. has the investment group made any 8 mean by that.
9 investments or extended loans where a municipality was a 9 Q You understand that the primary borrowers on
IO potential obligor or would have any potential obligations IO the loans that are at issue in the amended notice of claim
11 in connection with the loan? 11 are the S.R.B. entities?
12 A Yes. We've done transactions whereby one of 12 MR. FRECHETTE: I'm going to object: calls for
13 the things \Ve do are credit-tenant lease transactions. We 13 a legal conclusion.
14 do transactions that are called credit tenant lease 14 THE WITNESS: Do I answer?
15 transactions. whereby a municipality may be the lessee on a 15 MR. FRECHETTE: You can answer if you can
16 transaction for the payment of their obligation to us. 16 understand what the question is.
17 Q How do those loans work? 17 A Sure. I'm not a lawyer. I'm not a business
18 A A town may -- 18 person. So from a business perspective. this transaction
19 MR. FRECHETTE: Can I object for a moment? 19 was structured in such a way that we looked to the Town of
20 want to make sure that we stay focused on the scope of 20 Oyster Bay as the ultimate obligor. We never would have
21 a 50(h) examination which is limited to the occurrence 21 made this transaction unless that was the case. So we have
22 and extent of the injuries in this case. And I 22 a situation where we have the S.R.B. entities as an
23 certainly understand the desire to get some background 23 obligor. But really. it was underwritten almost like a
24 and information. But I'd like to make sure that at 24 look-through to the Town of Oyster Bay.
25 least you and I start off with an understanding that 25 Q The loan agreement itself and we'll get
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1 into this -- but you understand the loan agreement itself other members of senior management.
2 identifies the S.R.B. entities as the obligor: correct? 2 Q And both the private placement investment
3 A Yes. 3 committee and the investment policy committee each have to
4 Q Then there's certain circumstances under which 4 sign off on the loans?
5 Phoenix identifies that the town could be an obligor: 5 A Yes.
6 correct? 6 Q Were there memos that were prepared.
7 MR. FRECHETTE: Objection. It calls for a 7 describing the loans that went to each of those committees?
8 legal conclusion. And I think it misstates the 8 A Yes.
9 documents. We're not suggesting that -- that's fine. 9 Q Can you describe generally what the memos
10 A Can you repeat the question again? lO included?
11 Q Is it correct that it's Phoenix's position 11 A Yes.
12 that there are certain circumstances in which the town 12 MR. FRECHETTE: We didn't cover the ground
13 could become an obligor for amounts that were Ien unpaid 13 rules at the start. But one of the things lawyers will
14 by the S.R.B. entities? 14 onen tell you what to do is you have to let him finish
15 MR. FRECHETTE: Objection. 15 the question. And he'll let you finish the answer.
16 A Yes. 16 But this gentleman can't write it down if you're both
17 Q Has Phoenix entered into any other financing 17 talking at the same time. So try to hold back because
18 transactions that were similarly structured where Phoenix 18 I know you're anxious.
19 understood that any municipality could have an obligation 19 A Where were we?
20 if another obligor did not satisfy its amounts due to 20 (The requested portion was read back by the
21 Phoenix? 21 court reporter.)
22 A So I'm speaking from an investment 22 A Typically. the memo is a one-page summary that
23 perspective. We would classify municipal bonds or 23 talks about the -- that highlights the obligor dollar
24 municipalities as not just towns and cities. But also 24 amount. the interest rate. the terms. the rating of the
25 anything that has taxing authority over an area or a town 25 transaction. And if applicable. there's a halt:.page
Page 15 Page 17
I for the benefit of its citizens. So we have transactions I summary of the transaction. For certain transactions, that
2 whereby we have invested in funds. commingled funds that 2 summary may be excluded. depending on the credit rating of
3 have the backing. for example. of a state authority. still 3 the transaction.
4 considered a municipal bond as a backstop to our 4 Q Did the memos that were prepared for these
5 obligation. 5 loans include discussion of the potential obligations of
6 Q Have any of those been in New York? 6 the Town of Oyster Bay in conmection with the finances?
7 A No. 7 A Yes.
8 Q So is it correct that the transactions that 8 Q Did it provide any analysis for either the
9 are at issue in the amended notice of claim are the only 9 investment committees with regard to the legal requirements
IO investments that Phoenix has made where a New York 10 or limitations in connection with municipal financial
11 municipality or taxing authority would have under Phoenix's 11 obligations?
12 understanding an obligation to make payments if another 12 A No.
13 obi igor failed to satisfy amounts due? 13 Q You said that you were the primary contact in
14 A Yes. 14 connection with these financings: is that correct?
15 Q Can you tell me who at Phoenix had involvement 15 A It is.
16 or responsibility with respect to the financings that are 16 Q Is there anyone who was reporting to you who
17 at issue in the amended notice of claim? 17 was involved?
18 A Okay. So I was a primary business contact. 18 A No.
19 Approvals were obtained at two levels within our company. 19 Q Other than the committee members on the
20 At the time that this transaction was committed to. there 20 private placement investment committee and the investment
21 was the private placement investment committee. which signs 21 policy committee. was there anyone else at Phoenix who was
22 off on our transactions, and then there was another level 22 involved in negotiating or reviewing or assessing the
23 of high authority which was called the investment policy 23 finances?
24 committee. And that committee is comprised of my direct 24 A Yes. Brad Buck. our internal counsel at
25 manager, which is a chief investment otlicer, along with 25 Phoenix.
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Q Other than you and Mr. Buck and the members of I Q Who is Mr. Haber?
2 the two committees you identified. did anyone else at 2 A He is an investment broker that brings
3 Phoenix have any involvement with regard to these finances? 3 investment offerings to Phoenix.
4 A No. 4 Q What is N DH Capital?
5 Q Did Phoenix use any outside counsel in 5 A It's a broker. It's an intermediary.
6 connection with the finances? 6 financial intermediary that brings borrowers and lenders
7 A Yes, we did. 7 together.
8 Q And who did you use for outside counsel? 8 Q You knew Mr. Haber prior to this transaction?
9 A James Scantling, with McCarter & English. in 9 A ldid.
10 Hartford. Connecticut. IO Q Have you done other transactions with
11 Q Do you know whether Mr. Buck or Mr. Scantling 11 Mr. Haber?
12 is licensed to practice law in New York? 12 A I have.
13 A I don't know. 13 Q Have you done transactions with Mr. Haber
14 Q Do you know whether Mr. Buck or Mr. Scantling 14 since this transaction?
15 has any expertise in New York Municipal Law? 15 A I have.
16 A I don't know. 16 Q And what do you recall Mr. Haber telling you
17 Q Did Phoenix seek out any legal advice on the 17 about this potential opportunity when he contacted you in
18 topic of New York Municipal Law when it entered into these 18 the summer of201 I?
19 transactions? 19 A He had an offering for a transaction at the
20 MR. FRECHETTE: Objection. He's not going to 20 Town of Oyster Bay for facilities that were operated by
21 discuss the nature and scope of the attorney-client 21 Mr. Singh at town-owned facilities and a town-owned golf
22 relationship. Don't answer that question. 22 course where Mr. Singh's entities were a concessionaire
23 Q Did you consult with any attorneys who you 23 that operated these facilities. They needed improvements
24 knew to have expertise in the area of New York Municipal 24 to those facilities. And the town was keen on supporting
25 Law at the time that Phoenix entered into these 25 Mr. Singh's efforts to renovate and improve the facilities
Page 19 Page 21
transactions? and that they would back the transaction.
2 MR. FRECHETTE: Do not answer that question. 2 Q Do you recall whether at the time Mr. Haber
3 MR. PICKHARDT: I'm entitled to ask what 3 told you what the anticipated size of the financing was?
4 attorneys he -- 4 A Yes.
5 MR. FRECHETTE: You can ask ifhe contacted 5 Q What did he tell you?
6 attorneys in connection with this transaction. I don't 6 A The first loan was for the Woodlands. I think
7 think you can ask about the parameters he set for their 7 the gross amount of the note ended up being approximately
8 retention or what expertise he sought out. I think 8 12 million. including interest. No. I'm sorry. The first
9 that goes to the communications that he would have had 9 was 7. as I recall. I don't recall exactly. But it was
10 with them. Certainly. I have no objection to you 10 for Woodlands. 7.8. 7.8 million.
11 asking who he retained. II Q At the time that Mr. Haber first contacted
12 Q Other than Mr. Buck and Mr. Scantling. did you 12 you. ,vas that the only loan that he discussed with you. was
13 consult with any other lawyers in connection with this 13 the Woodlands loan?
14 transaction at the time that you entered into it? 14 A Yes.
15 A Not lawyers that represented us. But there 15 Q And do you recall whether at the outset he
16 were other lawyers involved in the transaction. 16 indicated to you the amount of financing that was being
17 Q When did the possibility of providing 17 requested or sought by the S.R.B. entity that was at the
18 financing for the S.R.B. entities first come into your 18 Woodlands. how much money did they need?
19 view? 19 A Yes.
20 A So the best of my recollection. probably the 20 Q What did he tell you as to how much financing
21 summer of 2011. 21 he needed?
22 Q And how did that issue or that potential 22 A I don't recall the exact numbers.
23 financing arise? 23 Q Was Mr. Haber looking to have Phoenix provide
24 A I received a call from Scott Haber at NOH 24 the full amount of that financing that was being sought?
25 Capital. 25 A Yes.
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I Q What else do you recall from that initial I back our loan to the S.R.B. entities.
2 discussion with Mr. Haber? What did you tell him? 2 Q When you say "back." do you mean that the town
3 A I told him that we typically do not invest in 3 would provide a guarantee?
4 restaurant operators or concessionaire operators on a 4 A Well. it was communicated to me that that the
5 standalone basis. He knows that we typically do investment 5 to,~n could not actually provide a guarantee. But there
6 grade-rated transactions. And I said under most 6 was -- you know, we -- again. I'm a business person. not a
7 circumstances when I do a deal. that was just to the S.R.B. 7 lawyer. and that we would-- the lawyers would be tasked
8 entities on a standalone basis. 8 with creating a structure or an agreement whereby the town
9 Q When you said that you don't typically invest 9 would back the obligations ofS.R.B. -- of the S.R.B.
IO in standalone concessionaire operators, do I take it from 10 entities.
11 your prior testimony. you don't recall having invested in a II Q When was it communicated to you that the town
12 standalone concessionaire loan in any other instance? 12 could not provide a guarantee?
13 A No. Only -- typically. these entities. like 13 A I would say in -- I don't exactly know what
14 the S.R.B. entities. are not rated. They don't have credit 14 time frame. But there was a call with NDH. ourselves and
15 ratings that are rated investment grade. 15 our outside counsel. And I may even want to say Mr. May
16 Q So were you effectively telling Mr. Haber that 16 was on this call. whereby this topic was discussed.
17 you were not interested? 17 Q Do you recall the phone call that you're
18 A Right. 18 describing. when it occurred?
19 Q What happened next? 19 A I'm going to say probably at that stage.
20 A He came back with a proposal that would have 20 September. Again. this was several years ago. I'm just
21 the Town of Oyster Bay back the transaction; in other 21 trying to recall to the best of my ability.
22 words. backstop our loan. our investment and the 22 Q You indicated that the initial discussions
23 transaction. 23 with Mr. Haber occurred during the summer. So sometime in
24 Q So is it correct that when Mr. Haber first 24 advance of this call; is that correct?
25 approached you. the concept of the Town of Oyster Bay 25 A Yes, that's correct.
Page 23 Page 25
backing the transaction was not something that he Q It was a number of months in advance of this
2 identified as a possibility? 2 call?
3 A The initial conversation was not along those 3 A Well. I'm thinking late summer. probably
4 lines. He may have had that already contemplated from his 4 started in August.
5 perspective. But the initial conversation was to have a 5 Q So when Mr. Haber initially came back to you
6 loan to the S.R.B. entities to which I said I don't do 6 with the idea of the town providing backing. you understand
7 stuff like that and I would need to have something more 7 that what he was suggesting is that the town would
8 substantial backing that. 8 essentially be providing a guarantee?
9 Q Do you recall how long after your first 9 A Again. I'm a business person. not a lawyer.
IO conversation. Mr. Haber came back to you with the idea of IO think the way we ended up leaving it was that the lawyers
11 the town provide backing? 11 would structure something. whereby the town would back it
12 A It was probably fairly quickly. I don't 12 and we backed this transaction. And you should also know
13 recall exactly how long ago it was. It was probably within 13 that I made it very clear that under no circumstances.
14 a week. 14 would I make this investment unless it had the ultimate
15 Q At that point in time. what knowledge did you 15 backing of the Town of Oyster Bay.
16 have with respect to the Town of Oyster Bay? 16 Q I'm not asking you from a legal perspective.
17 A No knowledge. 17 A No. I'm just saying from a business
18 Q Did you have any experience with any town 18 perspective. this was something I never would have
19 officials or anybody on behalfofthe Town of Oyster Bay 19 endeavored unless I was confident that I had a fairly solid
20 prior to this? 20 backstop from the Town of Oyster Bay.
21 A I did not. 21 Q From a business perspective. what's the
22 Q What happened next? 22 ditlerence between the type of backing that you were
23 A Mr. Haber came back with -- we started having 23 expecting and a guarantee?
24 conversations along the lines that. you know. there could 24 MR. FRECHETTE: Objection; calls for a legal
25 be a transaction here. whereby the TO\m of Oyster Bay would 25 conclusion. He's not a lawyer. And I don't think that
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goes to the issue ofoccurrence or the extent of the I Q Do you recall who told you that Harris Beach
2 injuries. 2 told you was counsel to the town?
3 Q I'm not asking you to provide a legal 3 A I'm going to say it was Howard Kurtzberg from
4 assessment. I'm just asking from a business perspective 4 NDH.
5 when you refer to the term "the To"'n of Oyster Bay is 5 Q Were there representatives at the S.R.B.
6 providing backing." I'm asking from a business perspective. 6 entities that participated in discussions where there was
7 is there some differentiation in your own head between that 7 talk about the benefits of financing to the town?
8 and a guarantee? 8 A No.
9 A No. 9 Q You referred earlier to a call in which you
10 Q Between the time when you had that second IO believed that Mr. May may have participated; is that
11 discussion with Mr. Haber, he introduced the idea of the I I correct?
12 town providing backing and the conversations where you 12 A Yes.
13 recall in September where there was a discussion about the 13 Q How many times did you communicate with
14 town not being able to provide a guarantee, had anything 14 Mr. May. to your recollection?
15 else transpired? 15 A I don't recall.
16 A No. We typically see offerings all the time. 16 Q W~hnumerou~
17 We turn down the majority of what we're sho\\'n. And at that 17 A Well. none of them were directly between me
18 stage, I said we're not interested unless we have 18 and him or the town. It was always done through the
19 enhancements. And I kind of just put it back in his court 19 intermediary. NDH Capital. So when there were calls. it
20 to come back to me. 20 was all arranged by NDH Capital and our outside counsel.
21 Q And Mr. Haber. you said. came back to you 21 Q Do you recall how many calls you were on that
22 shortly thereafter? 22 Harris Beach participated?
23 A Yes. 23 A Several calls. I don't recall the exact
24 Q And introduced the idea of the tO\m providing 24 number.
25 backing? 25 Q You described earlier a call that occurred in
Page 27 Page 29
A Right. l September in which you recall the topic of a town. quote.
2 Q What happened after that? 2 guarantee coming up: is that correct?
3 A I think we started having conversations about. 3 A Yes.
4 you know, what S.R.B. does. why would the town. you know-- 4 Q ls that the first time that you had heard the
5 what was the town's interest in all this. And that's when 5 concept that the Town of Oyster Bay would not be permitted
6 I found out that the town actually owned the Woodlands 6 to provide a guarantee?
7 facility. the town-run golf course. And enhancements that 7 A Yes.
8 were being made to the facility would benefit the taxpayers 8 Q Do you recall whether Harris Beach was on that
9 of the Town of Oyster Bay. 9 call?
10 Q Were these discussions with Mr. Haber or were 10 A I don't recall.
11 there others that you were talking with at that point in 11 Q Your best recollection was that Mr. May was on
12 time? 12 that call: is that correct?
13 A Initially. it was with Mr. Haber. And these 13 A I don't recall. There were numerous calls.
14 conversations then evolved with NDH's counsel. Alan 14 So the timing and who was on which call. difficult to
15 Kunzberg. our outside counsel. James Scantling. and also 15 recollect.
16 the outside counsel for the To\\'n of Oyster Bay which was 16 Q Do you recall who introduced that concept on
17 Harris Beach. 17 the call when it first came up?
18 Q Who did you speak with at Harris Beach? 18 A It was NDl-1 Capital. The town I knew was
I9 A Garry. These were group conference calls. 19 involved because they were trying to back this transaction
20 multi-party calls where they were discussing this whole 20 and have us eventually create a transaction that worked for
21 structure. 21 everyone that would allow Mr. Singh to make the
22 Q Do you recall when Harris Beach was first 22 improvements to the town facilities and also to have the
23 introduced to you as being counsel to the Town of Oyster 23 backing of the town. So it wasn't something that Phoenix
24 Bay? 24 ever proposed. It was something that came to Phoenix by
25 A I don't recall the exact time. 25 the parties involved.
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I Q You testified earlier that in that call. when MR. FRECHETTE: Objection. Don't answer that
2 the concept came up of the tO\\ITI not being able to provide a 2 question.
3 guarantee. that there was a discussion around the la,"yers 3 Q Is it correct that they were requested by
4 then addressing that topic; is that right? 4 Mr. Buck?
5 A That's correct. 5 MR. FRECHETTE: Objection. Mr. Buck can
6 Q Which lawyers were being suggested as 6 answer that -- well. you know what. if you know the
7 addressing the topic? 7 answer to that question. you can answer it.
8 A Counsel for NDH. Harris Beach and McCarter & 8 A Yes. Opinions are typically standard
9 English. So it was lav..yers from NOH. lawyers from the to\\>n 9 requirements for all of our finances.
10 and lawyers for Phoenix. IO Q In this case. you got opinions both from what
11 Q Other than that call in September, do you 11 you understood to be the Town of Oyster Bay's outside
12 recall any other discussions where the topic came up of 12 counsel as well as a deputy town attorney; correct?
13 limitations on the town's ability to provide a guarantee? 13 A Yes.
14 A It came up. I think. on some of the other 14 Q Is it standard to obtain multiple opinions on
15 calls. 15 behalfofone party?
16 Q What other calls do you recall it coming up 16 A Again. I'm not a lav,,yer. But I will say no.
17 on? 17 And I will say that I think the second opinion that was
18 A They were -- again, there were numerous calls 18 provided by Mr. May was offered by him.
19 to try and structure in such a way that ultimately, it made 19 Q So is it correct that Phoenix did not request
20 all the parties happy. So the concept of the termination 20 Mr. May's opinion. but it was one that he offered?
21 payment through the concession agreement came up at that 21 A I don't know the answer to that question.
22 point in time. And, again. I'm not a la\\lyer. To me. it 22 Mr. Buck would be the person to address that.
23 doesn't matter what you call it. If it gets us there from 23 Q You have no personal knowledge of Phoenix
24 a business perspective to the same place. it gets us there. 24 having requested the opinion from Mr. May: is that correct?
25 Q Other than conference calls where there were 25 A I don't recall. That's more of a lawyer's
Page 31 Page 33
I discussions about how to structure the deal to avoid the side of the transaction than the business side.
2 restrictions on the Town of Oyster Bay being able to Q 2 Do you recall when the topic ofan opinion
3 provide a guarantee. do you recall that topic being 3 letter first came up''
4 discussed in any other sense? 4 A It came up -- well, during the negotiations
5 A Well. as the negotiations progressed. our 5 when they were proposing the termination payment. Our
6 counsel. our internal counsel became very involved and 6 internal counsel. Brad Bliek, wanted to make it clear that
7 adamant in ensuring that -- again. I'm not a lawyer -- that 7 this would be a valid obligation of the town. So it was
8 the opinions from Harris Beach were solid~ in other words. 8 between September and November when the first loan closed.
9 that had certain language that made him comfortable. that 9 I don't remember the exact date.
10 these were valid and finding obligations to the Town of 10 Q Did you ever interact with Mr. May in person?
11 Oyster Bay. II A I believe I interacted with him once at the
12 Q You referred to certain opinion letters in the 12 Woodlands. There was a meeting at the Woodlands with
13 amended notice of claim? 13 several people. including Mr. Singh. NDH Capital. Howard
14 A Correct. I~ Kurtzberg. And I want to say that Mr. May ""as there as
15 Q On page 2. there's a reference to four opinion 15 well.
16 letters that were issued and addressed to NDH Capital 16 Q When was that meeting?
17 Corporation but were to the benefit ot: delivered to and 17 A It was in the fall of 2011.
18 relied upon by claimants. Are those the opinion letters 18 Q So this was prior to the close of the tirst
19 you're referring to? 19 loan?
20 A Yes. 20 A I believe so. yeah.
21 Q Is it correct that those opinion letters were 21 Q What was the purpose of the meeting?
22 requested by Phoenix? 22 A To be introduced to Mr. Singh, to get a tour
23 A Yes. 23 of the Woodlands facility and to get a general
24 Q And is it correct that they were requested 24 understanding of the town's role in the transaction and to
25 because Mr. Buck thought that they were necessary? 25 also get a sense from Mr. Singh of the general nature of
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I the improvements that he intended to make at the Woodlands A He was the actual contact person at the Town
2 facility. 2 of Oyster Bay that brought the transaction to Scott Haber.
3 Q Who was present for that meeting? 3 He's one of his associates. if you will. So he was the one
4 A Scott and myseu: Scott Haber. Howard 4 that sourced the transaction initially.
5 Kunzberg from NOH Capital. There was a gentleman there by 5 Q Outside of this transaction. do you have
6 the last name of Edelstein, who's atlil iated with N DH 6 experience with Mr. Edelstein?
7 Capital. And then I want to say that Mr. May was there. 7 A I don't because ultimately. my contact was
8 Q Was there anyone else on behalfofthe Town of 8 really with Scott Haber and N DH Capital.
9 Oyster Bay present? 9 Q Did you deal directly with Mr. Edelstein in
10 A I don't recall. I don't think so. 10 connection with these transactions?
II Q Do you recall what Mr. May said during that 11 A Not directly. It was an indirect
12 meeting? 12 relationship.
13 A I don't. 13 Q You referred to Mr. Singh being present at
14 Q Do you recall how long the meeting was? 14 this meeting. in-person meeting at the Woodlands in the
15 A It was a couple of hours. We had lunch as 15 fall of 2011. Is that the first time you had communicated
16 well as conversations and a tour of the facility. 16 directly with Mr. Singh?
17 Q Other than that one meeting. do you recall 17 A Yes.
18 meeting Mr. May in person at any other time? 18 Q Did you have any subsequent meetings with
19 A No. 19 Mr. Singh?
20 Q Did you at any point in time meet with 20 A Not face-to-face. no.
21 Mr. Garry or anyone else from Harris Beach in person? 21 Q You had subsequent phone calls with Mr. Singh?
22 A I did not. 22 A I believe-so. ves.
.
23 Q Other than the meeting with Mr. May. did you 23 Q How many phone calls did you have with
24 meet in person with any other representative of the Town of 24 Mr. Singh?
25 Oyster Bay? 25 A 1 don't recall.
Page 35 Page 37
l A I did not. Q Do you recall any other specific
2 Q Is that true at any point in time in 2 communications you had with Mr. Singh. the substance of
3 connection with either loan? 3 them?
4 A That's correct. 4 A No.
5 Q Other than your communications with Mr. May. 5 Q And you said that at the meeting. Mr. Singh
6 did you have telephone calls or communicate in any other 6 described for you the improvements that were-.to be made; is
7 fashion with any other representative of the Town of Oyster 7 that correct?
8 Bay? 8 A Yes.
9 A No. 9 Q What improvements did he describe?
10 Q Are you aware of whether Mr. Haber met with 10 A Renovations to one of the main function rooms,
11 any other representatives of the Town of Oyster Bay other 11 an outdoor sushi bar on the roof and just -- and also. he
12 than Mr. May? 12 was going to expand one of the rooms.
13 A I don't recall. He may have. I just don't 13 Q Did he tell you when he was intending to make
14 recall. 14 these improvements?
15 Q You don't recall Mr. Haber at any point 15 A Shortly atler he received the loan proceeds.
16 communicating to you that he had met with other 16 Q Did Mr. Singh provide any sort of written
17 representatives of the Town of Oyster Bay? 17 materials related to those proposed renovations?
18 A I don't recall. 18 A No.
19 Q Do you recall whether Mr. Edelstein met \Vith 19 Q Did you ever receive any written materials
20 any other representatives of the Town of Oyster Bay? 20 with respect to the proposed renovations?
21 A I don't recall. Mr. Edelstein was actually 21 A No.
22 the primary contact person with the Town of Oyster Bay. 22 Q Other than the discussion with Mr. Singh. did
23 do know that. 23 anyone else communicate to you the expected improvements
24 Q What was Mr. Edelstein's role in connection 24 that the financing were to be used for?
25 with these transactions? 25 A No.
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Q Other than the discussion with Mr. Singh at I A No. I did not. I didn't think it was
2 the single meeting at the Woodlands in the fall of 2011. 2 necessary other than the fact we had a backstop from the
3 did you have discussions with anyone else prior to 3 Town of Oyster Bay.
4 extending the financing about the improvements that the 4 Q Does Phoenix have standard due diligence
5 funding would be used to do'l 5 procedures that it undertakes when considering making an
6 A No. 6 investment in finance"
7 Q Did Mr. Singh provide you with any budgets? 7 A Absolutely.
8 A No. 8 Q Are those memorialized in some sorts of
9 Q Did Mr. Singh tell you how much it was going 9 policies or procedures?
IO to cost to make the improvements? 10 A I'm not sure if it's memorialized. It's
11 A I don't recall. Honestly. from a business 11 been -- our process is very straightforward. We typically
12 perspective. this deal was really underwritten with the 12 meet with the senior management teams of the companies we
13 backing of the town. 13 invest in. We at times performed due diligence at the
14 Q Did Mr. Singh tell you at that meeting that he 14 sites at the prices that we're investing in. We do
15 was under a contractual obligation to the town to make 15 financial analysis. And we have legal documentation that
16 improvements? 16 is reviewed and approved by internal and external counsel
17 A I don't recall. 17 for all of our transactions.
18 Q Do you recall having an understanding that 18 Q Is it correct you would generally describe
19 Mr. Singh was under a contractual obligation to make 19 your due diligence as falling into those three categories:
20 improvements at the facilities" 20 Meeting with senior management teams. financial analysis
21 A I don't recall. There may have been something 21 and documentation'l
22 in the concession agreement that required him to do so. 22 A Ycs. as well as. you know. due diligence where
23 But I just don't recollect. 23 we ask -- an opportunity to ask questions of the general
24 Q Other than the meeting at the Woodlands where 24 operation of the enterprise. financial results.
25 Mr. Singh \\-US present. have you ever been to the Woodlands? 25 Q In connection with the financing for the
Page 39 Page41
l A No. Woodlands. did you have any meetings with what you would
2 Q So you haven't been back? 2 consider to be senior management teams?
3 A No. 3 A No. because our approach to\\--ards this
4 Q Did you at any point ask anyone on Phoenix's 4 transaction was different from our typical scenario because
5 behalf to go back to inspect the Woodlands? 5 at the time. the Town of Oyster Bay was a publicly-rated
6 A No. 6 municipality with a single-A credit rating which we
7 Q Did you at any point ask anyone to confirm 7 reviewed as a strong rating. It was a municipality which
8 whether any of the three renovations that Mr. Singh 8 was supposed to be transparent. So we did not undergo the
9 described on that day in the fall of 2011 were undertaken? 9 typical due diligence and procedures that we would for a
10 A No. 10 privately held company or a publicly-traded corporation.
11 Q Do you know. sitting here today. whether those 11 Q So there were times when you will invest in a
12 improvements were done? 12 publicly-traded corporation that has a rating: correct'l
13 A No. 13 A Yes.
14 Q Have you been back to the Town of Oyster Bay 14 Q In instances where you invest in a
15 other than that visit at the Woodlands in the fall of2011? 15 publicly-held corporation that has a strong rating. is it
16 A No. 16 typically your practice to request to meet \vith senior
17 Q To your knowledge. did Mr. Buck ever visit the 17 management teams?
18 Town of Oyster Bay? 18 A Not always. Sometimes we will do a conference
19 A To my knowledge. he has never been there. 19 call. Sometimes the team. the management team will do what
20 Q Did you at any point in time ask to speak with 20 we call an investor road show where they will do a visit.
21 any representatives of the town other than Mr. May? 21 different towns around different cities around the country
22 A No. 22 that meet with investor groups. They typically come to
23 Q Did you ever ask to see any construction plans 23 Hartford. Connecticut. And we meet them there as part of
24 for the improvements that Mr. Singh was describing his 24 the initial conversations with the transaction.
25 intentions to make? 25 Q Would it be consistent with your standard due
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diligence practices for you to extend a loan to a A I was under the impression that generally
2 corporation where you had only met with a single 2 speaking. the resolutions for certain things -- again. I'm
3 representative of the corporation? 3 not a municipal expert by any means -- and our
4 A Typically. no. 4 understanding was that they were resolutions that tied to
5 Q Can you recall other instances where your due 5 the concession agreement that backed our transaction.
6 diligence was limited to discussions with a single 6 Q When did you come to learn that there needed
7 representative of a company that you were loaning to? 7 to be a town board resolution?
8 A I don't recall. 8 MR. FRECHETTE: Objection. That's not what he
9 (A short recess was taken.) 9 said. He said for certain things.
10 Q We're back on the record. You understand 10 MR. PICKHARDT: Let me ask the predicate
11 you're still under oath'? 11 question.
12 A Yes. 12 Q Did you come to have an understanding that a
13 Q Is there any testimony you provided so far 13 town board resolution was required for the town to enter
14 today you want to alter or change? 14 into the transactions contemplated in connection with their
15 A No. 15 financing?
16 Q Before we broke. we were discussing the 16 A My understanding was that such resolutions
17 standard due diligence steps that Phoenix takes when making 17 existed.
18 an investment. 18 Q Did you have any understanding as to whether
19 Had you ever done due diligence on a town 19 they were required?
20 before? 20 A No.
21 A No. 21 Q Can you describe what due diligence Phoenix
22 Q Have you ever done due diligence on another 22 did around the town board resolutions that you understood
23 form of municipality'' 23 authorized the transaction?
24 A Not a true municipality. 24 A They were merely part of the document
25 Q When you say that are you referring to the 25 requirements that were required. advised by our counsel.
Page43 Page45
1 fact there may be other taxing authorities? Q Did you yourself review the town board
2 A Yeah. They're municipal taxing authorities 2 resolution that you were being told to authorize the town
3 that aren't really municipality taxing authority towns. 3 to enter into the transaction?
4 Q At the time. did you consider what steps were 4 A I think initially I did. yes.
S necessary for performing due diligence with respect to the 5 Q Did you form some view as to whether the town
6 Town of Oyster Bay? 6 board resolution covered the transaction?
7 A Yes. 7 A Personally. I did not. We relied on our
8 Q And what steps did you undertake with respect 8 counsel. And we assumed the town counsel. as well as the
9 to the Town of Oyster Bay? 9 involvement of the town attorney. had gotten all that.
10 A I researched credit ratings. Web site. IO Q Do you know when the town board approved the
11 publicly available financial information. Again. this was 11 resolution that was identitied to you as being the one that
12 so different from our typical transaction. 12 authorized the transaction'?
13 Q Other than credit ratings and publicly 13 A I don't recall.
14 available financial information. what other due diligence 14 Q Do you recall having an understanding that it
IS did you do with respect to the Town of Oyster Bay? 15 had been authorized or issued by the town board more than a
16 A That was it. 16 year before the transaction?
17 Q Did you have an understanding that the Town of 17 A I don't recall.
18 Oyster Bay was only permitted to act through its town 18 Q Do you recall whether you ever asked whether
19 board? 19 the town board resolution was created for this transaction
20 A No. 20 in particular?
21 Q Did you have an understanding that there 21 A I don't recall.
22 needed to be an authorizing town board resolution for the 22 Q What other due diligence did Phoenix perform
23 town to enter into any agreement? 23 with respect to the Town of Oyster Bay?
24 MR. FRECHETTE: Objection: it assumes facts 24 A I think I've covered it already. That was
25 not in evidence. Go ahead and answer if you can. 25 pretty much it.
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Q What due diligence did Phoenix perform with I Q Did you review those agreements?
2 respect to the S.R.B. entities? 2 A I did along with our internal counsel and our
3 A I don't recall. There were conference calls. 3 external counse I.
4 There was at least one conference call. I'm assuming we 4 Q I believe you testified that you also received
5 asked for financial statements. the conversations that 5 copies of at least one or more board resolutions from the
6 occurred during the face-to-face meeting at the Woodlands. 6 town: is that correct?
7 Q You assume you asked for financial statements. 7 A Yes. As part of the closing package, there
8 Is it correct you don't have a recollection? 8 was a copy of the board resolution tied to the concession.
9 A I don't recall. Again. this was underwritten 9 Q Did you receive a copy of the board resolution
JO under the premise that the Town of Oyster Bay would back JO in advance of closing?
11 this transaction. So to me. they were the ultimate credit. 11 A Yes. It was part of the closing package. the
12 And that's what I look for when I underwrote the 12 closing document binder. if you will.
13 transaction. 13 Q Did you receive that during due diligence; in
14 Q When you underwrite a transaction where 14 other words. did you assess the town board resolutions?
15 there's a guarantor. do you perform due diligence both on a 15 A Not as part of due diligence. no. We
16 primary obligor and a guarantor? 16 typically do a commitment. due diligence, legal
17 A Yes. In most cases. they were atliliated 17 documentation and the closing. in that order.
18 entities. 18 Q So during due diligence. you received a copy
19 Q What about instances where they're 19 of the concession agreement with S.R.B. Convention: is that
20 unatliliated? Do you perform due diligence with respect to 20 correct?
21 both entities? 21 A I don't recall if it was during due diligence
22 A I don't recall a situation like that. 22 or as part of the legal review that happened afterwards.
23 Q So in all the instances that you recall. you 23 Q Sometime prior to closing?
24 performed due diligence both on a primary obligor plus a 24 A Yes. before closing. But I'm not sure if it
25 guarantor? 25 happened during due diligence. I think it may be semantics
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A Yes. They're typically atliliated I here.
2 enterprises. So a subsidiary would borrow and perhaps, for 2 Q I'm wondering whether there was an analysis
3 example. have a guarantee by the parent company. 3 performed prior to ultimately executing the final
4 Q Other than what you've described as being the 4 agreements with respect to the concession agreement.
5 discussions with Mr. Singh. did you do any other due 5 A Yes. That was reviewed internally at Phoenix.
6 diligence with respect to the improvements that the 6 as well as by outside counsel.
7 financing was to be used for? 7 Q Prior to executing the agreements. was there
8 A No. 8 an analysis or review of town board resolutions?
9 Q Other than what you've already described. did 9 MR. FRECHETTE: Do you mean by him?
10 you perfonn any other financial analysis as part of 10 MR. PICKHARDT: By anyone at Phoenix. to his
11 Phoenix's due diligencel 11 knowledge.
12 A No. 12 A At Phoenix. I think we all looked at it. To
13 Q Do you recall what documentation you received 13 be honest with you. we were relying mostly on outside
14 in connection with due diligence that was performed? 14 counsel. that this was all valid and tied in and worked.
15 A Can you rephrase the question? Documentation 15 Q Other than the concession agreement and town
16 from whom? 16 board resolutions. were there any other documents that were
17 Q Do you recall what documentation you received 17 received. to your recollection. from the town or from
18 from the S.R.B. entities or from the tO\'<TI'? 18 S.R.B. that was assessed as part of due diligence or legal
19 A I don't recall what I received from the town. 19 review?
20 I think we were -- well. we were relying on the -- we were 20 MR. FRECHETTE: And you would include in the
21 reviewing the concession agreement and the amounts thereto. 21 concession agreement. the amounts that he referenced?
22 Q For Woodlands. you received a copy of the 22 MR. PICKHARDT: Correct.
23 concession agreement with S.R.B. Convention as well as all 23 A I don't recall. But outside of the promissory
24 amendments thereto; is that correct? 24 notes. the amendments and the board resolutions.
25 A Yes. 25 Q Do you recall what the interest rate was on
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I the loan? A Contemporaneously with the closing.
2 A I don't recall exactly. But I know it was. 2 Q Do you recall the amount of funds. how much
3 you know. 8.8 percent or something like that. The first 3 money was actually extended to Mr. Singh upon closing?
4 transaction. yeah. which was significantly lower than the 4 A I don't recall off the top of my head. It's
5 interest rate Mr. Singh was paying on his existing 5 in the documents. But off the top of my head, I don't
6 liabilities. 6 remember.
7 Q Do you know how that interest rate was arrived 7 Q Had you ever extended a construction loan?
8 at? 8 A No. That's not something we typically do.
9 A Again. this goes back to 2011 in a diflercnt 9 Q Are you familiar with construction loans?
IO interest rate environment. It was probably a spread over 10 A I am.
11 the average lite treasuries with a liquidity premium that 11 Q And what's your experience with construction
12 we get on private transactions. 12 loans. just a high level? Why are you familiar with them?
13 Q How did that interest rate compare to other 13 A I used to work at a bank a long time ago and
14 private transactions that you entered into? 14 would typically do drawdowns and advances based on
15 A It was an attractive interest rate for a 15 progress.
16 single-A rated entity. 16 Q So there would be milestones and there would
17 Q When you say "single-A rated." you're 17 be drawdowns that would be permitted based on milestones?
18 referring to the Town of Oyster Bay? 18 A Yes.
19 A Yes. 19 Q Do you have an understanding as to why
20 Q When you say "an attractive interest rate." 20 construction loans are structured that way?
21 attractive from whose side? 21 A To ensure that the proceeds are used for what
22 A From my side. Well. also an attractive 22 they were done for: To build a facility or construct the
23 interest rate to Mr. Singh. 23 project at hand.
24 Q Is it correct that for a single-A rated 24 Q You had an understanding in this instance that
25 entity, it would not be an attractive interest rate? 25 the funds were to be used for construction; correct?
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A Yes. A Yes.
2 Q What would your typical rate had been 2 Q And is there a reason why the loan was not
3 approximately at that time for a single-A rated entity? 3 structured based upon milestones and drawdov,ns as you would
4 A I just don't recall that. This was back in 4 typically do for a construction loan"
5 201 I. I don't remember. 5 A Because we viewed th is as a transaction that
6 ,,Q Multiple percentage points lower? 6 was backed by the Town of Oyster Bay.
7 'A I don't know. 7 Q You indicated that the reason why construction
8 Q Did anyone on behalfofthe town ever try to 8 loans are structured based upon milestones and drawdowns
9 negotiate the interest rate down? Would that surprise you? 9 was to ensure that the funds were used for the construction
IO A No. I mean this transaction was very 10 purpose"
II different. 11 A Yes.
12 Q In what way was this transaction very 12 Q Was there some other procedure put in place
13 different? 13 with respect to this loan to ensure that the ti.Inds were
14 A The structure. whereby S.R.B. entities as a 14 used for the improvements?
15 concessionaire for the town in a facility that wasn't owned 15 A No.
16 by a concessionaire. It was actually owned by the town. 16 Q What do you recall occurring after the close
17 Typically. the operator would own the facility. 17 of the loan on the Woodlands?
18 Q Do you know where the closing was held? 18 MR. FRECHETTE: Objection. In what respect?
19 A I don't recall. 19 Lots of things have happened since then.
20 Q Did Phoenix attend the closing in person? 20 Q What do you recall happening next with respect
21 A No. 21 to the S.R.B. entities or the Town of Oyster Bay after that
22 Q Do you remember when the closing was? 22 event"
23 A Novemberof20l1. 23 A From the loan perspective, it was a monthly
24 Q Do you recall when the funds were provided to 24 pay obligation. And the S.R.B. entities made timely
25 Mr. Singh? 25 payment of the schedule. They paid on time.
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I Q Were they making payments directly to you or I with a proposal for a second transaction.
2 did they go through NDH? 2 Q Do you recall when Mr. Haber reached out to
3 A They would go directly to us. 3 you?
4 Q Speaking of which. do you recall what the 4 A I don't. It was after the closing of the
5 arrangement was between Phoenix and NDH with regard to the 5 first transaction. Maybe a few months afterwards.
6 initial loan? 6 Q Do you recall when Mr. Haber reached out to
7 A In what way? 7 you. whether he indicated the size of the financing that
8 Q How did NDH make money? 8 was being sought?
9 A NDH gets a fee. 9 A I'm sure it was discussed. But I don't
10 Q Do you recall what the NDH fee was? IO remember the exact dollar amount.
1I A I don't recall off the top of my head. 11 Q Do you recall whether the dollar amount
12 Q ls it calculated as a percentage. as a -- 12 changed over time?
13 A It's obtained via discount in terms of what 13 A l don't recall that.
14 the amortization schedule was at origination and what it 14 Q What do you recall with respect to what
15 was to us. 15 happened. what the steps were in the second financing?
16 Q You don't recall in this instance what that 16 A He called to discuss a second loan to one of
17 discount was~ is that correct? 17 the S.R.B. entities regarding a facility at the beach. very
18 A There were different numbers for each loan. 18 similar to the first transaction. that improvements would
19 But that's not something typically we'd look at. At 19 be made and that it also would be backstopped by the Town
20 inception. I didn't know what that tee was. 20 of Oyster Bay. very similar to the first transaction.
21 Q Did there come a time when you understood that 21 Q Do you recall what you said back to Mr. Haber
22 the S.R.B. entities were interested in obtaining a second 22 when he contacted you about this opportunity?
23 financing? 23 A I said it was something that we would
24 A Yes. 24 consider. If it was structured the same way. whereby we
25 Q When did you tirst -- 25 were sure we had the backing of the town.
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I MR. FRECHETTE: I'm going to object to that Q And what happened next?
2 because I don't think the S.R.B. entities were 2 A We had subsequent calls to discuss the
3 interested in obtaining a second financing. I think 3 transaction. And I don't exactly remember the exact steps.
4 S.R.B. Concession was. 4 But typically. you would have a general understanding of
5 Q Did you have an understanding at the time that 5 what the deal was. If all the parties were amenable to the
6 you entered into the first loan that Mr. Singh controlled a 6 terms. then we would proceed to the documentation stage.
7 different S.R.B. entity that had the concession at one of 7 Q Do you recall whether you had any discussions
8 the Oyster Bay beaches? 8 with Mr. May in connection with the second financing?
9 A I don't recall that. 9 A I don't recall that. I don't remember.
IO Q You came to understand that at some point in 10 Q I take it from your prior testimony, you don't
11 time that Mr. Singh controlled another S.R.B. entity that 11 recall having any in-person meetings with Mr. May in
12 had a concession at Tobay Beach: correct'? 12 connection with the second financing: correct?
13 A Yes. 13 A Correct.
14 Q Do you recall whether you were aware of that 14 Q Do you recall whether you had any discussions
15 prior to when the issue came up of a potential second 15 with Mr. Garry or anyone else from Harris Beach in
16 financing? 16 connection with the second financing?
17 A Could you repeat that? 17 A I'm assuming -- well. I'm certain there were
18 Q Do you recall whether you were aware of the 18 conference calls again where the same general topics came
19 fact that there was another S.R.B. entity with a concession 19 up with regards to a termination date.
20 at Tobay Beach prior to the time when you came to learn 20 Q Why are you certain that that came up?
. 21 that they may be interested in doing a second financing? 21 A Because our in-house counsel was adamant that
22 A No. I don't recall that. 22 we would have an opinion from the town's outside counsel.
23 Q How did you come to learn that S.R.B. 23 that this was a binding obligation by the Town of Oyster
24 Concession was interested in doing the financing? 24 Bay.
25 A Through Scott Haber. He reached out to me 25 Q I take it you don't have any specific
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recollection of any telephone calls in which Mr. Garry or A This is several years ago. I don't recall.
2 Mr. May participated in connection with that second 2 Q Do you recall whether you received any plans
3 financing? 3 or a written description of the improvements that the
4 A I don't know the specifics. 4 financing was to be used for?
5 Q Do you recall whether the initial transaction 5 A I did not receive that
6 was used as the starting structure for the second 6 Q Do you recall whether you received budgets?
7 transaction? 7 A I didn't receive that.
8 A My understanding was that. yes. it was a 8 Q Did you actually tour the Tobay Beach facility
9 template for the second transaction. 9 to take a look at or come to an understanding as to what
10 Q Do you recall whether there were any IO the funds were to be used for''
11 modifications made? II A I did not.
12 A I don't believe there were. 12 Q Did you ask someone else on your behalf to
13 Q What did you understand the financing to be 13 tour Tobay Beach to come to an understanding as to what the
14 needed for in respect to the second transaction? 14 tunds would be used for?
15 A Improvements to a restaurant facility located 15 A ldidnot.
16 at one of the town beaches. 16 Q Did you come to an understanding as to what
17 Q And how did you come to learn that that was 17 improvements Mr. Singh had already made at Tobay Beach?
18 the purpose of the financing? 18 A I don't recall.
19 A From conversations with NDH Capital. 19 Q Do you recall taking any steps to come to an
20 Q Mr. Haber? 20 understanding as to the specific improvements that would be
21 A Yes. 21 undertaken with the financing?
22 Q Other than a conversation with Mr. Haber. did 22 A I don't recall. I think at some point, there
23 you have discussions with anyone else about the purpose of 23 were conversations about kitchen equipment and other
24 the second financing? 24 various things. But I just don't remember specifics.
25 A I don't recall. 25 Q Did anyone tell you when Mr. Singh was
Page 59 Page61
Q Did you have any discussions with anyone at I intending to make the improvements?
2 the town with respect to the purpose of the second 2 A Did anyone tell me? I don't recall. I know
3 financing? 3 it was going to happen shortly thereafter.
4 A I don't believe so. I don't recall. 4 Q So similar to the Woodlands where the
5 Q Did you have any discussions with Mr. Singh or 5 construction was going to occur shortly after the loan was
6 any other representative of S.R.B. Concession with regard 6 extended; correct?
7 to the purpose of the second financing? 7 A That's correct. And the only reason why a lot
8 A I'm sure I did. 8 of these steps were not taken was. again. we were doing an
9 Q Why do you say you're sure you did? 9 investment backed by the Town of Oyster Bay. And that was
10 A Because it would be kind of typical. the 10 our ultimate obligor.
11 course of actions you would take as part of the process. 11 Q The second loan closed in June of2012;
12 So I'm sure there were conversations with Mr. Singh about 12 correct''
13 what he was going to do with the money. 13 A I believe so. yes.
14 Q Do you recal I whether the second financing was 14 Q The first loan closed in November of 2011:
15 larger or smaller than the first? 15 correct?
16 A It was larger. 16 A Right.
17 Q Do you recall how much it was? 17 Q So approximately seven months after the
18 A The gross amount was just over $12 million. 18 closing of the first loan?
19 Q Do you know how much the funded amount was? 19 A Right.
20 A I don't have that handy. 20 Q Did you ask anybody to go see what
21 Q Do you remember approximately? 21 construction had occurred at Woodlands between November of
22 A I don't. 22 2011 and June 2012?
23 Q Do you have any specific recollection of 23 A No.
24 having any discussion with Mr. Singh regarding how the 24 Q Did you take any steps whatsoever to confirm
25 financing was going to be used? 25 as part of your due diligence whether Mr. Singh had
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perfonned any of the construction that he represented to from Harris Beach more so than this document. But it looks
2 you he would be undertaking shortly at the Woodlands? 2 like this was part of the closing binder.
3 A No. 3 Q So the opinion letter that you're recalling is
4 Q Do you recall what documents Phoenix would 4 different from this'?
5 view as part of its due diligence or legal review in 5 A I believe so.
6 connection with the second loan? 6 Q In what way was the opinion letter that you're
7 MR. FRECHETTE: Don't answer what documents 7 recalling different than the document that's in front of
8 were reviewed as part of the legal review. But any 8 you as Exhibit 2?
9 documents that you're aware ot: you can certainly refer 9 MR. FRECHETTE: Can we go off the record for a
10 to. 10 second'?
II A It would be similar to what we did for the 11 MR. PICKHARDT: Sure
12 first transaction: A ratings confinnation. any current 12 (A discussion was held off the record.)
13 financial infonnation of the town. along those lines. 13 MR. PICKHARDT: Back on the record.
14 Q Did Phoenix review the concession agreement 14 Q Mr. Correa. during the break. your counsel
15 between S.R.B. Concession and the town. including the 15 indicated that he was willing to stipulate to the fact that
16 amendments? 16 this is one of the opinion letters that is identified in
17 A I believe we did. 17 the amended notice of claim as having been addressed to NDH
18 Q Did Phoenix review town board resolutions that 18 Capital Corporation for the benefit of Phoenix. So I'll
19 were being presented as authorizing the transaction? 19 make that representation to you.
20 A Yes. 20 But is there something that in your 0\\-11
21 Q Did you have an understanding as to whether 21 recollection is distinguishing this document from what you
22 there was a new town board resolution that was authorizing 22 recall as being the Harris Beach opinion letter?
23 the second transaction? 23 A No. It was a phrase I was looking for.
24 MR. FRECHETTE: Objection as to form. 24 Q What phrase were you looking for'?
25 A I don't recall. 25 A Number Three.
Page 63 Page65
Q Do you recall whether there was any discussion Q Number Three states: "The Tobay documents are
2 as to whether there needed to be a new town board 2 the valid binding obligations ofTobay. enforceable in
3 resolution different from the board resolution that was 3 accordance with their respective tenns by NDH and its
4 used to authorize the first transaction'? 4 assessors and assigns": correct?
5 MR. FRECHETTE: I want to just caution the 5 A Correct.
6 witness that when Mr. Pickhardt refers to any 6 Q Is that the opinion that was most important to
7 discussion, if you had discussions with somebody other 7 Phoenix in this letter?
8 than your lawyers, then you can talk about that. But 8 A I recall seeing opinions that it was a valid
9 any discussions you would have had with your la\\yers. 9 and binding obligation by the Town of Oyster Bay.
10 please don't refer to those. IO Q From your perspective. was obtaining an
11 A Yeah. I just don't recall. 11 opinion that the agreements that the Town of Oyster Bay
12 (A short recess was taken.) 12 were entering into were valid and binding obligations of
13 (The above-referred-to document was marked as 13 the town. the valid opinion that you wanted to make sure
14 S0(h) Exhibit 2 for identification. as of this date.) 14 you had received?
15 Q Mr. Correa, is there any testimony you want to 15 A Yes.
16 alter or change from what you've testified so far', 16 Q Do you have any prior experience with Harris
17 A No. 17 Beach?
18 Q I'm going to show you a document that has been 18 A I don't.
19 marked as S0(h) Exhibit 2. It's a letter, dated 19 Q Do you have any prior experience with William
20 November 16th, 2011, from Harris Beach. signed by William 20 J. Garry?
21 J. Garry to NOH Capital Corporation. Is this one of the 21 A No.
22 documents you identified in the statement of claim as being 22 Q Did Phoenix perform any due diligence into
23 a document that Phoenix relied upon'? 23 Harris Beach's retention by the Town of Oyster Bay?
24 A So this may have been part of the closing 24 A No.
25 package. I don't recall it. I recall the opinion letter 25 Q Did Phoenix inquire as to whether Harris Beach
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had been retained pursuant to an authorizing town board Q Do you recall what involvement Phoenix had
2 resolution? 2 with respect to the drafting of this opinion letter?
3 A No. We assumed that since a town attorney was 3 A Yes. Our internal counsel. Brad Buck. was
4 working on this transaction alongside Harris Beach. that it 4 very involved in what was stated in the opinion letters to
5 was assumed that they were representing the Town of Oyster 5 get him comfortable with the letter.
6 Bay. 6 Q Do you recall whether there were opinions in
7 Q You did not perform any due diligence there to 7 here that were specifically requested by Mr. Buck.,
8 confirm the circumstances of Harris Beach's retention: is 8 A Yes. He did request specific things. I don't
9 that correct? 9 know the specific language that he requested.
10 A No. That is not a normal course of action for 10 MR. FRECHETTE: I want to caution you when you
11 us. 11 answer these questions. you can certainly discuss and
I2 Q Did you inquire as to whether Harris Beach 12 testify as to dealings that Mr. Buck had with
13 also performed any work for Mr. Singh or his related 13 third-parties that you're aware ot: But do not discuss
14 entities? 14 dealings that you had with Mr. Buck relative to the
15 A No. I wasn't aware of that. 15 same subject matter.
16 Q You were aware of that today. that Harris 16 (The above-referred-to document was marked as
17 Beach performed work for Mr. Singh and his related entities 17 S0(h) Exhibit 3 for identification. as of this date.)
18 as well? 18 Q I'm showing you another document that has been
19 A I was not aware of that. 19 marked as 50(h) Exhibit 3. This is a letter dated as of
20 Q You do not recall Phoenix having acquired as 20 November 18th. 2011 that is on Otlice of the Town Attorney
21 to whether Harris Beach also performed work on behalf of 21 Town of Oyster Bay's stationery. signed by Frederick E.
22 any other parties in connection with this transaction? 22 May, addressed to NDH Capital Corporation.
23 A I don't recall that. To me, that would be a 23 Do you recognize this as one of the other
24 conflict of interest by Harris Beach. 24 opinion letters that is described in the notice of claim
25 Q Do you recall being aware of the fact that 25 that Phoenix relied upon,
Page 67 Page69
Harris Beach was operating under a potential contlict of A Yes.
2 interest? 2 Q Is this the opinion letter that you testified
3 A No. I was not. 3 about earlier that was offered by Mr. May?
4 MR. FRECHETTE: I don't understand the tenor 4 A Yes.
5 to your questions that you. in fact, have information 5 Q I'll note that the Harris Beach letter is
->6 to the effect that Harris Beach also represented 6 dated as of November 16th. And this letter is dated two
7 Mr. Singh because it assumes facts not in evidence. 7 days later on November 18th.
8 And if you have a good-faith basis for the question -- 8 Do you have any recollection as to the
9 MR. PICKHARDT: I have more than a good-faith 9 circumstances that led to Mr. May providing this opinion
10 basis. 10 letter?
II MR. FRECHETTE: Okay. I accept that. II A I don't recall what led him to do that.
12 Q What was the basis for your understanding that 12 Q Do you recall whether he was specifically
13 Phoenix was able to rely upon a letter that was directed to 13 requested to do it',
14 NDH Capital Corporation? 14 MR. FRECHETTE: Asked and answered. Go ahead.
15 A That such letters would also -- that all the 15 You can try it again.
16 documents would be assigned to us. And we were the 16 A I don't recall whether we specifically asked
17 successor to all the documents. 17 him for this. again because I think -- this is really a
18 Q So you understood that you were able to rely 18 legal document.
19 upon the opinion letter as a successor or assignee of NDH? 19 Q Do you see that Enumerator 3 within the
20 A That is correct. 20 opinion is the same opinion that was contained in Harris
21 Q Did you request that Harris Beach provide a 21 Beach opinion that the Tobay documents are the valid
22 opinion letter directly to Phoenix? 22 binding obligations ofTobay enforceability in accordance
23 A I don't recall. And again, I'm on the 23 with their respective terms by NDH and its successors and
24 business side. I'm not internal counsel or one of the 24 assigns; do you recall any discussion around needing to
25 lawyers. So I don't recall if the lawyers did that or not. 25 have the same opinion provided by multiple attorneys that
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the Tobay documents were duly authorized and enforceable? 1 A I don't know how to answer this question.
2 A As the business guy in this transaction. I 2 MR. FRECHETTE: Start by not guessing.
3 don't recall that. It may have been something that 3 A So, no, 1 don't.
4 happened with the lawyers. 4 Q This document includes a structure, providing
5 Q I take it you have no knowledge as to whether 5 a termination payment from the town upon certain events.
6 this opinion letter was shared with anyone else at the Town 6 Do you recall that?
7 of Oyster Bay beyond Mr. May? 7 A Yes.
8 A I don't know. 8 Q Do you recall who came up with the idea for
9 (The above-referred-to document was marked as 9 that structure for the transaction?
IO 50(h) Exhibit 4 for identification, as of this date.) 10 A I don't.
11 Q I'm showing you a document that has been 11 Q Do you recall whether it was Phoenix as
12 marked as Exhibit 50(h)4, which is entitled Amendment to 12 opposed to somebody else?
13 Concession Agreement. and reterences a number of parties. 13 A No. We did not propose that. Phoenix did not
14 S.R.B. Convention & Catering Corp. and is dated on the 14 propose that.
15 execution page as of November 18th, 2011. 15 Q Do you see on the first page, there are a
16 Have you seen this document before? 16 number of whereas clauses?
17 A Yes. 17 A Yes.
18 Q Do you recognize this as the amendment to the 18 Q And if you look at the third whereas clause.
19 S.R.B. Convention concession agreement that relates to the 19 it appears at the bottom of page I. do you see that at the
20 financing from November 2011? 20 bottom of that whereas clause, there's a reference to the
21 A Yes. 21 concession agreement having been extended through
22 Q Is this a document that you reviewed and 22 December 31st. 2049?
23 dratled as it was being negotiated? 23 A Yes.
24 A I reviewed. I did not draft. 24 Q Do you recall being aware that the concession
25 Q I'm just asking whether you reviewed it in 25 agreement had a term that extended through 2049?
Page 71 Page 73
draft form. A Yes.
2 A Oh, in draft form. I don't recall. 2 Q And you see that earlier in that clause,
3 Q Are you familiar with the terms of this 3 there's a reference to the concessionaire, which is defined
4 amendment? 4 to be S.R.B. Convention. having proposed to make additional
5 A Generally speaking. yes. 5 capital improvements in the amount of 3.25 million to the
6 Q Do you know who took the lead with respect to 6 facility?
7 drafting this document? 7 A Yes.
8 A I don't know. I don't know which lawyer. 8 Q Do you recall being aware of the fact that
9 Q Do you know what Phoenix's role was with 9 S.R.B. Convention had proposed as part of its concession
10 respect to drafting? 10 agreement to make improvements in the amount of
11 A We would normally not draft this. They would 11 3.25 million?
12 be presented to us for edits and comments. 12 A Yes.
13 Q Do you know whether the drafting was 13 Q And do you see that the next whereas clause on
14 undertaken by counsel for the town as opposed to counsel 14 the next page provides that the financing was being sought
15 for one of the other parties? 15 to facilitate the completion of capital improvements?
16 MR. FRECHETTE: By counsel for the town. 16 A Yes.
17 again, there's a dispute about Harris Beach. 17 Q Is that also consistent with your
18 MR. PICKHARDT: Purported or ostensible 18 understanding as to what was being represented?
19 counsel. 19 A Yes.
20 MR. FRECHETTE: I don't know whether you were20 Q Do you recall inquiring as to why a
21 referring to Mr. May. 21 $7.8 million loan was being taken out to complete
22 MR. PICKHARDT: Yes. 22 $3.25 million in improvements?
23 Q So you don't know whether Mr. Kurtzberg or 23 A I viewed the 3.25 as a requirement under the
24 Mr. May or Mr. Garry, who took the lead with respect to 24 concession agreement. the larger amount, would finance
25 drafting this document; is that correct? 25 additional improvements beyond the scope of what was
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I reterenced to the prior page. A Yes.
2 Q So was it your understanding that the 2 Q If you tum to the next page. do you see that
3 financing was being used to complete improvements beyond 3 there's a section that is Romanette II: do you understand
4 those that were required? 4 this to be a section that is describing a termination
5 A Yes. 5 payment that would be made in the event that the town
6 Q Do you recall having that discussion with 6 elected to terminate the concession agreement for some
7 anyone, that the financing was going to be used for 7 other reason?
8 improvements beyond what was required under the concession 8 A Yes.
9 agreement? 9 Q And there's a formula in the last sentence of
10 A I don't recall specifically. IO Romanette 11 that indicates how that termination payment
11 Q But that was your understanding at the time'} 11 would be calculated: correct?
12 A Yes. 12 A Yes.
13 Q Do you see that on the third page of this 13 Q And that formula is calculated by calculating
14 document, there's a Section 3 of the agreement that 14 5 percent of the total capital improvements made to the
15 includes an amendment to the last paragraph of Section 32 15 facility by the number of years remaining in the initial
16 of the concession agreement that sets forth a description 16 term to be capped at a hundred percent: correct?
17 of a termination payment that would be made by the town in 17 A Yes.
18 the event that the concessionaire defaulted under its loan 18 Q And this is for any termination: this
19 from NDH? 19 provision applies to any termination that would occur prior
20 A Yes. 20 to 2025: correct?
21 Q And do you see that in Romanette I. that there 21 MR. FRECHETTE: Objection.
22 is at the bottom of this page a sentence that starts: "The 22 A Yes.
23 termination shall equal the sum ot'' and includes certain 23 Q How many years would be left on the term --
24 amounts that would be included in the termination payment? 24 MR. FRECHETTE: In fairness. I think it does
25 A Yes. 25 bear mention that it actually says "any default
Page 75 Page77
I Q Is it your understanding that the termination 1 occurring prior to December 31. 2025" of whether
2 payment that is described here would include all the 2 resulting from an event default set forth in A through
3 amounts that were due to Phoenix under the loan agreement? 3 G by concessionary or otherwise. There are -- well.
4 A Yes. 4 I'll leave it at that.
5 Q So it would be a payment in full to Phoenix of 5 Q If the town were to terminate the agreement
6 all amounts due that would be defined as a termination 6 for any reason. including a default under A through G or
7 payment; correct? 7 otherwise prior to December 31. 2025, then it would be
8 MR. FRECHETTE: Wait a minute. Could you read 8 obligated to make the payment as calculated in that last
9 that question back. please'l 9 sentence: correct?
IO (The requested portion was read back by the 10 MR. FRECHETTE: It calls for a legal
11 court reporter.) 11 conclusion. You can state what your understanding is.
12 MR. FRECHETTE: I'm going to object to form. 12 But as I said. it calls for a legal conclusion. The
13 But you can go ahead and answer if you can. 13 document speaks for itself.
14 A It states that the termination payment shall 14 A My understanding is if they terminated the
15 include an amount ot: A. the it says in the document. 15 concession agreement. it would be paid in full.
16 "The termination payment shall be the sum of. A. the 16 Q The formula here is based upon applying
17 repayment amount set forth in the loan agreement." which 17 5 percent of the total per year up to 20 years left on the
18 would be our agreement. and B. all of the amounts due and
II
18 term: correct?
19 to become due on the loan documents.
11
19 A Yes.
20 Q So is it correct that your understanding is 20 Q So if there's 20 or more years left on the
21 that the effect of this provision was to create an 21 term. it would be a hundred percent of the capital
22 obligation of the town to make a termination payment in the 22 improvements: correct?
23 amount of all amounts due to Phoenix under the loan 23 A Yes.
24 agreement in the event that S.R.B. Convention defaulted 24 Q As of2025. that would still be more than 20
25 under the loan? 25 years left on the term: correct?
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I A Yes. Q So. to your knowledge, it was possible that a
2 Q So at all times under this provision. it would 2 $10 million termination payment would be in excess of the
3 be a hundred percent of the capital improvements: correct? 3 value of capital improvements that were actually in place
4 A Yes. 4 in Woodlands?
5 Q Do you know why a formula was included when in 5 MR. FRECHETTE: Objection; calls for
6 all instances in which it would apply. it would be a 6 speculation; also assumes facts not in evidence.
7 hundred percent? 7 A I don't know.
8 A I'm not sure I understand your question. 8 Q If you ,vould tum to the execution page of
9 Q Why include a formula if under every 9 this document. do you know when any of the signatures there
IO circumstance in which it could be calculated. it would be a 10 on this page were atlixed?
11 hundred percent? Why didn't it just say the termination 11 MR. FRECHETTE: Are you asking him whether
12 shall -- payment shall be a hundred percent of the capital 12 they're different from what the notarial acknowledgment
13 improvements? 13 said?
14 A This concession agreement predates us: in 14 MR. PICKHARDT: Yes. I'm asking not with
15 other words. some of this language was carryover from -- is 15 respect to the notaries. I'm asking him with respect
16 my understanding. from the prior original document. Why 16 to the actual execution page.
17 this is here. I don't know. 17 Q Do you have any personal knowledge as to
18 Q So you don't know why the formula was included 18 when --
19 here other than maybe it was a vestige of the prior 19 MR. FRECHETTE: The notary purports to
20 agreement? 20 establish --
21 A Yes. 21 MR. PICKHARDT: Don. I appreciate but I'm
22 Q As a reference to the value of capital 22 not asking you for testimony. And I'm not asking for
23 improvements, do you recall any discussion around what the23 what the legal effect is of a notary which we can
24 value of the capital improvements were at Woodlands? 24 debate at some other point in time.
25 A No. 25 Q I'm asking as a factual matter, were you
Page 79 Page 81
Q If you would turn to paragraph 5, which is on present for the signing of this document?
2 the next page, do you see that there is a provision that 2 MR. FRECHETTE: I appreciate that this isn't a
3 states that the capital improvements would be treated as of 3 deposition. And the CPLR doesn't apply here. When the
4 the date hereof as $10 million? 4 document contains a notarial acknowledgment, I think
5 A I see that. 5 asking the witness to tell you when it was signed, when
6 Q Do you recall that there was a provision in 6 it contains that acknowledgment is a little bit of a
7 the agreement that specified the capital improvements as 7 trick question. And if you're asking whether or not --
8 equaling $10 million? 8 MR. PICKHARDT: Don. I appreciate --
9 A I don't recal I. 9 MR. FRECHETTE: Excuse me. I'm speaking.
10 Q Do you have any knowledge as to whether 10 MR. PICKHARDT: This is not your opportunity
II $IO million was an appropriate number for purposes of II to speak. If you have an objection. you can raise an
12 assessing the actual capital improvements that existed at 12 objection.
13 Woodlands at the time? 13 MR. FRECHETTE: I have an objection.
14 A No. I don't recall. I wasn't aware of that. 14 MR. PICKHARDT: Then state your objection
15 Q Do you know how that $10 million number was 15 concisely. please.
16 arrived at? 16 MR. FRECHETTE: Again. the CPLR doesn't apply
17 A I do not. 17 here. The rules of evidence don't apply in the same
18 Q Are you aware of any diligence having been 18 ,vay here. So I could make a speaking objection. And I
19 performed as to the value of capital improvements at the 19 intend to do so. If you want to ask him whether or not
20 Woodlands? 20 he has knowledge that the documents were not executed
21 A No. 21 on the date that appears in the notarial
22 Q Do you know whether $10 million had any 22 acknowledgment. that's fine to do so.
23 relationship to the value of the actual capital 23 MR. PICKHARDT: That's all I'm asking.
24 improvements in place at Woodlands at the time? 24 MR. FRECHETTE: Okay.
25 A I do not. 25 Q Do you know whether or not this document was
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executed in the presence of the notaries that are retlected I A Yes.
2 on the notarial page? 2 Q Is that consistent with your recollection as
3 A I do not know that. 3 to what was being represented?
4 Q Do you know whether anyone for Phoenix was 4 A Yes.
5 present for the execution of this document? 5 Q If you would please turn to the bottom of
6 A I don't know. I'm pretty sure the answer is 6 page 2 to the section entitled Loan Interest and
7 no. Typically for closings, they're handled by a law tirm. 7 specifically. Subpart A. Agreement to Make the Loan, do you
8 sign it. We typically are not present at that closing. 8 see in the third sentence. it refers to the loan proceeds
9 Q So other than from what you would surmise from 9 being disbursed in accordance with instructions to be
10 the face of the document, you would have no knowledge as to 10 provided by borrower to lender?
11 whether Mr. Genova's signature here was actually provided II A Yes.
12 by Mr. Genova? 12 Q And is it your recollection that the actual
13 MR. FRECHETTE: This assumes facts not in 13 instructions that were made by S.R.B. Convention was that
14 evidence. 14 the loan proceeds be disbursed in a lump sum amount on
15 Q I'm just asking what your personal knowledge 15 closing?
16 is 16 A Yes.
17 A I don't know. 17 Q Do you see in the next sentence, it states.
18 (The above-referred-to document was marked as 18 "The closing of the loan shall take place on October 28th.
19 50(h) Exhibit 5 for identi tication, as of this date.) 19 2011." the closing date?
20 Q I'm showing you a document that has been 20 A I can see it.
21 marked as Exhibit 50(h)5 which is entitled Term Loan. 21 Q This is a document dated as of November 18th.
22 Pledge and Security Agreement and is dated in the preamble 22 2011.
23 as of November 18th, 2011. Do you recognize this document? 23 Do you know why there's a reterence to a
24 A Yes. 24 closing date some 21 days prior to the date of the loan
25 Q Is this the loan agreement for the loan at 25 agreement?
Page 83 Page 85
Woodlands? A Many times. these documents have a target
2 A Yes. The original documentation between NDH 2 date. And because all the conditions precedent haven't
3 and the S.R.B. entities. S.R.B. Convention, rather. 3 been met. the closing date gets pushed back until all the
4 Q What was Phoenix's involvement with respect to 4 documents are in order.
5 creation of this document? 5 Q This is a closing date that precedes the
6 A We would review and make any comments or edit 6 execution of this agreemen~.
7 as we deemed appropriate. But this document was created by 7 A It was before: right? ls that what you're
8 counsel for NDH Capital. 8 saying?
9 Q Mr. Kurtzberg? 9 Q Yes.
10 A Yes. 10 A The closing date could have gotten pushed
11 Q Did Phoenix review and provide comments to 11 back.
12 this document? 12 Q So do you believe the closing date occurred on
13 A I don't recall. There may have been some 13 October 28th. 2011?
14 comments. I don't recall. It's been a while. 14 A No. What I'm saying is -- so this is an
15 Q Did you understand that this was the loan 15 agreement between NOH and S.R.B.
16 agreement that would be assigned to Phoenix? 16 Q Correct.
17 A Yes. 17 A Not an agreement between S.R.B. and Phoenix.
18 Q Do you see that the preamble. the second 18 So they may have proposed that they close on this document
19 whereas clause refers to S.R.B. Convention having agreed to 19 and then have it assigned to us afterwards. I don't really
20 make certain improvements to the facility? 20 know the answer to that question.
21 A Yes. 21 Q You don't know why --
22 Q And that the next whereas clause refers to the 22 A I'm just saying from a business perspective.
23 financing in the amount of$7.8 million being made in order 23 maybe they closed on this beforehand and assigned it and
24 to facilitate the completion of the improvements being 24 closed it over to us. I don't know.
25 made? 25 Q Do you know as a factual matter whether the
22 (Pages 82 - 85)
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I funds were provided to S.R.B. on November 18th or on Regulations. et cetera?
2 October 28th? 2 A Yes.
3 A I'd have to go back to when our funding date 3 Q And that there were certain Romanette subparts
4 is. But since NOH was not providing capital. it would have 4 below that?
5 to be when it came from us. That would be in November. I 5 A Yes.
6 believe. 6 Q You see that Romanette Ill concerns use of
7 Q It's your best belief that there was no 7 proceeds?
8 closing in October where funds were extended? 8 A Yes.
9 A I don't recall. 9 Q And you see under the use of proceeds. it
10 Q If you turn to page 5. section entitled 10 indicates that "All proceeds from the loan shall be used in
11 Conditions Precedent. you see that there's a number of 11 the observance and performance of borrower's obligations
12 conditions that are listed here as conditions for the 12 under the concession agreement"?
13 lender to have an obligation to make the loan? 13 A I see that.
14 A I do. 14 Q And did you have an understanding that this
15 Q Is it your understanding that all these 15 was in the loan agreement?
16 conditions were satisfied? 16 A Yes.
17 A Again. I'm not the lawyer. I'm assuming that 17 Q In fact at the time. you understood S.R.B.
18 the lawyers assured us that all of these conditions were 18 Convention to be taking out a loan that was in excess of
19 satisfied before closing actually occurred. 19 its obligations under the concession agreement: correct?
20 Q And do you see that under Section 7 or 20 A Yes.
21 Romanette Vil. one of the requirements is certified copies 21 Q So what was your understanding at the time as
22 of four board resolutions? 22 to how this requirement was being satisfied?
23 A I see that. 23 A The requirement under the concession
24 Q Is this what you were referring to earlier as 24 agreement?
25 requirements. that board resolutions be part of the closing 25 Q The requirement under the loan agreement that
Page 87 Page 89
I package? all of the proceeds would be used in observance and
2 A Our lawyers would require this. yes. 2 performance of borrower's obligations under the concession
3 Q Is it your best understanding that those were 3 agreement.
4 actually provided? 4 A I'm not sure I understand your question.
5 A Yes. it is. 5 Q What was your understanding as to how the use
6 Q And>there's also a reference to an incumbency 6 of proceeds provision would be satisfied when a
7 certificate of the town. 7 $7.8 million loan was being taken out with only
8 Do you have a recollection as to whether an 8 $3.25 million of obligations for improvements under the
9 incumbency certificate ,vas provided? 9 concession agreement?
10 A I'm sure it was. 10 A I go back to what I originally said. that I
11 Q What is an incumbency certificate? 11 thought they were going to be improvements beyond the scope
12 MR. FRECHETTE: Objection. Go ahead. If you 12 of what was required under the concession agreement.
13 know what it is. describe it. 13 Q And do you understand that there was a
14 A Isn't it the people that are signing documents 14 provision. requiring that all proceeds be used in
15 are authorized to do so? 15 observance and performance of borrower's obligations under
16 Q It's your understanding that the town provided 16 the concession agreement''
17 a certificate. indicating that Mr. Genova was authorized to 17 A Yes.
18 sign the agreement? 18 Q So I'll ask the question again.
19 A Can you repeat that question? 19 How do you reconcile that with your knowledge
20 Q Is it your understanding that the town 20 at the time that there were funds being used for things
21 provided a certificate. indicating Mr. Genova was 21 that were not required under the concession agreement'?
22 authorized to sign the agreement? 22 A I assumed it was a business decision by
23 A Yes. 23 Mr. Singh. to do additional improvements.
24 Q If you please turn to page 8. do you see that 24 Q Did you have any understanding as to how
25 there's a section entitled Foreign Assets Control 25 Mr. Singh would be able to comply with the use of proceeds
23 (Pages 86 - 89)
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provision when he was taking a loan out for much more money that you reference wasn't necessary.
2 than he had required improvements under the concession 2 Q Since the closing of this financing. have you
3 agreement? 3 taken any steps to enforce the use of proceeds provision to
4 A I assumed he used part of the proceeds to meet 4 ensure that the amounts that were extended by Phoenix were
5 the requirements here. And any excess would go to other 5 used for purposes of improvements?
6 improvements. 6 A No.
7 Q So did you not understand at the time that 7 Q Have you ever notified Mr. Singh or S.R.B.
8 there had been a representation made that all proceeds 8 Convention that they were in breach of provisions under the
9 would be used for obligations under the concession 9 loan agreement by having failed to use amounts that were
IO agreement? IO extended by Phoenix to create improvements that were
11 A Did I understand that? 11 required under the concession agreement?
12 Q Correct. 12 A No.
13 You testi tied a moment ago that you understood 13 (The above-referred-to document was marked as
14 that a portion of the proceeds would be used to satisfy 14 50(h) Exhibit 6 for identification. as of this date.)
15 Mr. Singh's obligations. and another portion of the 15 Q I'm showing you a document that has been
16 proceeds would be used for things he was not obi igated to 16 marked as 50(h) Exhibit 6 which is entitled Assignment of
17 do under the concession agreement. 17 Concession Agreement Proceeds that is dated as of
18 A That's my impression. yeah. 18 November 18th. 201 l. Do you recognize this document?
19 Q So did you understand that he was going to be 19 A Yes.
20 in breach of his obligation under the loan agreement to use 20 Q What was Phoenix's involvement with respect to
21 all proceeds to satisfy obi igations under the concession 21 the drafting of this document?
22 agreement? 22 A Again. outside counsel for NOH Capital drafted
23 MR. FRECHETTE: Objection. That calls for a 23 this document. And internal counsel and external counsel
24 legal conclusion. 24 reviewed and made edits as they deemed appropriate.
25 A I was not aware that it would cause a breach, 25 Q What was the purpose of this agreement?
Page 91 Page 93
no, I was not aware of that. A It's part of the whole package. We assigned
2 Q Do you have a recollection, understanding at 2 all the documents from NDH Capital over to Phoenix.
3 the time as to what portion of the proceeds would be used 3 Q Do you understand that this is an assignment
4 for improvements he was required to make as compared to 4 by S.R.B. Convention of any proceeds it would receive under
5 improvements that he was simply deciding to make? 5 the concession agreement from the town to NDH?
6 A No. I don't recall. 6 A Correct.
7 Q Other than this provision here. are you aware 7 Q So the reference to an assignment here is not
8 of anything that obligated Mr. Singh to use the funds for 8 an assignment to Phoenix but assignment to NOH?
9 purposes of improvements? 9 A I'm sorry. Ultimately, everything was
10 A No. IO assigned to us. That's what I meant by that.
11 Q Are you aware of any steps that were taken by 11 Q Do you have an understanding that there was an
12 Phoenix <?r anyone else to seek to enforce this use of 12 assignment of a concession agreement proceeds that went
13 proceeds provision? 13 from S.R.B. Convention to NDH?
14 A No. I'm not aware. 14 A Yes.
I5 Q Are you aware of any steps that were taken by 15 Q And what was the purpose of that assignment.
I6 Phoenix or anyone else to monitor compliance with this use16 to your understanding?
17 of proceeds provision? 17 A Anything that was paid -- to transfer the
18 A No. 18 rights of any payments made under the concession agreement
19 Q Are you aware of any structure that was 19 that were owed to SRB forwarded to NOH.
20 included within the financing itself to ensure that this 20 Q Would the etlect of that assignment be that if
21 use of proceeds provision would be complied? 21 S.R.B. defaulted on a loan. that the termination payment
22 A No. It wouldn't be in accordance with our 22 made by the town would go to NDH and then to Phoenix?
23 underwriting of the transaction. This was not a 23 MR. FRECHETTE: Objection; calls for a legal
24 construction loan. This was really a loan that was backed 24 conclusion. Go ahead and answer if you can.
25 by the Town of Oyster Bay. So all those control measures 25 A Yes, that is correct.
24 (Pages 90 - 93)
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I Q And is it correct that that is etlectively how MR. FRECHETTE: Objection; assumes facts not
2 the town was providing its backing of the loan? 2 in evidence; calls for him to speculate. He's also not
3 A In effect. yes. 3 a la,1,yer.
4 Q And it was also. in effect. a guarantee: 4 A Yeah. I don't know how to answer that
5 correct? 5 question.
6 MR. FRECHETTE: Objection: calls for a legal 6 Q Are you aware of any benefit that would accrue
7 conclusion. He's not a ta..vyer. The documents speak 7 to the tO\'-TI ifnone of the proceeds were used to create any
8 for themselves. 8 improvements at the facilities?
9 A Yeah. I'm not -- again. I'm on the business 9 MR. FRECHETTE: You mean beyond operating them
10 side. I'm not a lawyer. So I'll leave it at that. 10 on a day-to-day basis'' Go ahead.
11 Q And do you see on the second page that there's II A I don't know.
12 a No. 2 on that page that states "Tobay acknowledges that 12 Q Do you see in paragraph 5, there's a reference
13 it has and will receive substantial municipal benefit from 13 to Tobay waiving. relinquishing and disclaiming any
14 Assignor's performance under the Concession Agreement"? 14 circumstance whatsoever which might constitute a legal or
15 A Yes. 15 equitable discharge or de tense of Tobay or its obligation
16 Q What did you understand to be the substantial 16 to pay the payment amounts; is it your understanding that
17 municipal benefit that the Town of Oyster Bay was 17 the Town of Oyster Bay waived all detenses that it might
18 receiving? 18 have to payments to be made in the event ofa default by
19 A So the town is a municipality. It's not in 19 S.R.B. Convention?
20 the business of operating a catering and restaurant 20 MR. FRECHETTE: Objection. Respectfully, what
21 facility and that they've hired S.R.B. Concession to do 21 relevance does his understanding have? The document
22 that on their behalf. so that their facility is run 22 speaks for itself. It does or it doesn't. He's not a
23 properly and maintained correctly. 23 lawyer. You can answer if you can.
24 Q And what was the substantial municipal benefit 24 A I can't answer that. To me. this is legalese.
25 that the town was receiving in connection with the 25 Q Are you aware of an assignment of concession
Page 95 Page 97
financing? agreement proceeds existing under any other financing
2 A The Woodlands facility.just enhancing a 2 transaction?
3 facility that serves a town golf course. 3 A I don't understand that question.
4 Q So ,vas it the improvements that would be made 4 Q Have you ever seen an assignment of concession
5 with the money that was being provided. would be the 5 agreement proceeds in connection with any other financing
6 benefit to the town? 6 you've been involved in across your 30 years at Phoenix?
7 MR. FRECHETTE: Objection; mischaracterizes 7 A An assignment of --
8 what he said. Go ahead and answer if you can. 8 Q -- concession agreement proceeds.
9 A The proceeds were used to improve a facility 9 A No. We've done transactions where there have
10 that was owned by the town on a town-owned golf course for 10 been assignments of cash flows. But concession agreement
II the benefit of the taxpayers within the Town of Oyster Bay. II proceeds. no.
12 Q And that's what I understood. 12 Q Are you aware of any other transaction that
13 You're saying that the use of the proceeds to 13 has ever been entered into where a municipality provided an
14 make improvements at the Woodlands facility would be a town 14 assignment of concession agreement proceeds for the benefit
15 benefit; correct? 15 ofa lender?
16 A Yes. 16 A I don't recall.
17 Q Are there other town benefits beyond the use 17 Q Do you recall whether in connection with this
18 of the proceeds to create improvements that you understood 18 transaction. you were advised that any other municipality
19 to be within the scope of this provision? 19 had ever provided an assignment of concession agreement
20 A I don't know. 20 proceeds as part of a financing for a lender?
21 Q Are there any others that come to your mind? 21 A I don't recall that.
22 A No. 22 Q In paragraph 5. it talks about waiving and
23 Q If none of the proceeds of the loan were used 23 relinquishing and disclaiming rights.
24 to make any improvements at the Woodlands. would there be 24 Do you recall any other agreement that Phoenix
25 any benefit to the town? 25 has entered into with a municipality or taxing authority
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that included similar waivers or relinquishments in all the drafting"
2 rights? 2 A Our internal counsel and our external counsel
3 A That. I don't recall. 3 most likely reviewed and made edits to it. if appropriate.
4 Q You don't recall ever having seen one of those 4 Q Do you know whether there is a version of this
5 before; correct? 5 which has an execution from PHL Variable Insurance Company?
6 A I just don't recall if we had ever done one or 6 A I believe there is.
7 seen one before. 7 Q If you'll note. this document requires the
8 Q Do you recal I what negotiation there was on 8 borrower to certity. confirm and agree as to certain facts.
9 the part of the town with respect to this document? 9 and those facts are enumerated I through IO'?
IO A I don't recall that. 10 A Yes.
11 Q Do you recall the town pushing back on any 11 Q You see that No. 2 in this document is that
12 terms whatsoever under this document? 12 "The borrower shall use the proceeds of the loans to
13 A I don't recall. 13 satisfy its obligations under the concession agreement"?
14 Q Do you recall hearing at any point in time 14 A I do see that.
15 that this is something the town needs in order for it to 15 Q Do you have an understanding as to why the
16 agree to the assignment and structure that was being put in 16 notice and acknowledgment of assignment included this term?
17 place? 17 A I do not.
18 A I just don't recall. 18 Q Do you recall that. in fact. the notice and
19 Q If you would turn to the signature pages. you 19 acknowledgment of assignment included a term that was
20 see that on the first of the signature pages. there's a 20 similar to the one under the loan agreement with respect to
21 signature that appears to be from Leonard Genova? 21 the borrower having to use proceeds to satisfy obligations
22 A Yes. 22 under the concession agreement?
23 Q Do you have any knowledge with respect to the 23 A Again. I don't recall.
24 facts surrounding Mr. Genova's supposed signature of this 24 Q I think you testified before that you do not
25 document? 25 recall any steps being taken by Phoenix with respect to
Page 99 Page 101
I A No. I enforcement of a similar prov is ion of the loan agreement.
2 Q So you don't have any knowledge as to whether 2 Do you have any recollection of Phoenix having
3 this is. in fact. Mr. Genova's signature or not? 3 taken any steps to enforce the provision under the notice
4 A No. 4 and acknowledgment of assignment that proceeds be used to
5 (The above-referred-to document was marked as 5 satisfy obligations under the concession agreement?
6 50(h) Exhibit 7 for identification. as of this date.) 6 A No. I do not
7 Q I'm showing you a document that's been marked 7 Q Do you recall any steps having been taken to
8 as Exhibit 50(h)7. which is entitled Notice and 8 notify S.R.B. Convention that they were in breach by having
9 Acknowledgment of Assignment. which is dated as of 9 failed to use proceeds to satisty obligations under the
10 November 18th. 2011. I will note for you that the version IO concession agreement?
11 I have here has signatures on behalfof two parties but 11 A No. I wasn't aware that there was a breach.
12 does not have a signature on behalfof PHL Variable 12 Q Is this a standard provision in a loan
13 Insurance Company. 13 agreement or an assignment that a borrower use funds for
14 The execution aside. do you recognize this 14 their stated purpose?
15 document? 15 A I don't recall. I mean I've seen an
16 A Yes. 16 assignment is made. it's being used for certain things.
17 Q And what is it? 17 But I don't know if it's standard language or not. I'm not
18 A It's an acknowledgment by the parties that the 18 a la\.vyer.
19 documents are being assigned. 19 Q So you don't know whether this is standard
20 Q Other than the lack of a signature. do you 20 language in the investments that Phoenix makes that
21 have any reason to believe that this is not the final copy? 21 borrowers use funds for purposes that are stated?
22 A No. I do not. 22 A Can you repeat that question?
23 Q Do you know who drafted this document? 23 Q Sure.
24 A Howard Kurtzberg. 24 In investments that Phoenix makes through
25 Q Did Phoenix have involvement with respect to 25 loans. is it standard for there to be provisions requiring
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I the borrowers to use funds for stated purposes? I refinancing that was intended: is that correct?
2 A Yes. there are. 2 A Right.
3 Q Why do such provisions exist? 3 Q Did Phoenix request any certification from
4 A In order to ensure that the proceeds are used 4 S.R.B. Convention or Mr. Singh. that funds had been used?
5 for the intended purpose. 5 A No. because again. this was a very difterent
6 Q And why as an investor do you care about that? 6 transaction from the larger transactions that we are
7 A You don't want the funds being used for other 7 involved in. And. again, this was really under.uitten with
8 purposes. 8 the backstop of the Tovm of Oyster Bay. So we did not.
9 Q Why not? 9 Q So that was what you were concerned about. is
10 A Because that's not what you're lending money 10 that the town would stand behind it?
11 for. II A Yes.
12 Q What steps does Phoenix typically take with 12 (A lunch recess was taken.)
13 respect to monitoring of enforcement of compliance with 13 (The above-referred-to document was marked as
14 such provisions? 14 50(h) Exhibit 8 for identification. as of this date.)
15 A It depends on the transaction. Sometimes \~e 15 MR. PICKHARDT: Let's go back on the record.
16 will -- well. many times what we do is provide financings 16 Q Mr. Correa. is there any testimony from prior
17 that refinance under the debt obligation. So that will be 17 to lunch that you want to alter in any way?
18 stated in there. And we will then receive otlicer 18 A No.
19 compliance certificates that will state that they've done 19 Q I put in front of you a document that has been
20 that. And they will also provide financial statements that 20 marked as 50(h)Exhibit 8. which is a letter dated as of
21 will show that there was compliance with -- you'I I see that 21 June 21st. 2012. on the stationery of Harris Beach. signed
22 those levels go do\~n. one for one swap. that every dollar 22 by William J. Garry. addressed to NDH Capital Corporation.
23 is used to refinance another debt obligation. 23 Do you recognize this as the Harris Beach
24 Q Are there other examples as to how Phoenix 24 opinion letter on the loan to S.R.B. Concession~
25 monitors or enforces compliance with such provisions when a 25 A Yes.
Page 103 Page 105

loan is not being used as a refinancing? Q And this is similar in form to the opinion
2 A I'm trying to figure out how to word this. 2 letter that was issued by Harris Beach in respect of the
3 Many of the transactions that we do are investment-grade 3 prior loan~ correct?
4 transactions to major corporations that are significantly 4 A Yes.
5 larger than an S.R.B. entity or the Town of Oyster Bay. 5 Q Do you recall there being any requests that
6 And some of them are publicly traded. So there's really no 6 Harris Beach modily the opinion that it was issuing in
7 follow-up requirement that proceeds are used in the way 7 respect of the S.R.B. Concession loan in any way from what
8 that they're representing it's going to be used because 8 it had provided with respect to the prior loan?
9 many times. they're a publicly-traded enterprise. 9 A On this letter or the document?
IO And you can see that they've invested the IO Q In the letter.
11 capital into a factory or they used the proceeds to 11 Do you recall any request that the opinion
12 refinance debt. which is very difterent from a middle 12 changed in form in any respect?
13 market borrower. from a bank where you go, you kick the 13 A No.
14 tires. and you ensure that the proceeds were used in the 14 Q Do you see that in the second full paragraph.
15 ways that they were intended. 15 that there's a reference to certain resolutions of To bay.
16 Q How do you address these provisions when 16 and there is identified two resolutions?
17 you're working with a middle markets borrower? 17 A Yes, I do see it.
18 A We don't. Typically, we're involved with much 18 Q Do you recall that in the other Harris Beach
19 larger enterprises. 19 opinion letter. there was a reterence to four board
20 Q With a much larger enterprise. you would then 20 resolutions?
21 review public filings to confirm that funds were used? 2I A Yes, I do recall that.
22 A Audited financial statements. 22 Q Do you have any understanding as to why Harris
23 Q You said with respect to refinancing. you 23 Beach's opinion letter here reterences two board
24 would expect to get an officer certificate or some type of 24 resolutions as opposed to four?
25 certification that the funds had been used for the 25 A No. I don't.
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I Q You don't recall any discussion around that I time of the financing''
2 topic; is that correct? 2 A Yes.
3 A I don't. Opinion letters are really discussed 3 Q Did you review it in dratl before it was
4 amongst the lawyers in our shop. 4 finally executed?
5 Q Do you have any personal knowledge of whether 5 A Yes.
6 the Harris Beach opinion letter was shared with anyone at 6 Q Do you see that there's a reference in the
7 the Town of Oyster Bay aside from Mr. May? 7 second whereas clause to the concessionaire here. S.R.B.
8 A I'm not aware of that. 8 Concession. having agreed to make $2.5 million in
9 (The above-referred-to document was marked as 9 improvements to the beach facility as part of its
10 50(h) Exhibit 9 for identification. as of this date.) l O concession agreement with the town?
II Q I'll provide you a document that's been marked II A Yes.
12 as 50(h) Exhibit 9. which is a letter dated as of 12 Q Did you have an understanding at the time that
13 June 22nd. 2012. which is on the stationery of the Office 13 the only obligations that the S.R.B. Concession had with
14 of the Town Attorney of Oyster Bay and is signed by 14 respect to making improvements was limited to its agreement
15 Frederick E. May. 15 to make $2.5 million of additional improvements?
16 Do you recognize this as the opinion letter of 16 A Yes.
17 Mr. May in connection with the S.R.B. Concession loan? I7 Q You also understood that the loan that was
18 A Yes. 18 being extended was $12.5 million; correct?
19 Q Do you have any recollection of there being 19 A Yes.
20 any discussion about Mr. May modifying the form of his 20 Q What was your understanding at the time as to
21 opinion from the one that he had provided in respect of the 21 why S.R.B. Concession was taking out a $12.5 million loan
22 prior loan? 22 when it only had $2.5 million of improvement obligations?
23 A No. I don't. 23 A So this amendment related to an existing
24 Q I take it you also don't recall any discussion 24 concession agreement that predates our involvement. And my
25 here as to why there are references to only two resolutions 25 understanding is that all these prior improvement
Page 107 Page 109

l as opposed to more? I requirements predated us in the past. I don't necessarily
2 A I don't, no. 2 see a correlation between this number and our number
3 Q Do you have any personal knowledge of this 3 because I think this number was years before.
4 opinion letter being shared with anyone at the town beyond 4 Q Did you have any understanding at the time as
5 Mr. May? 5 to why Mr. Singh and S.R.B. Concession was taking out a
6 A I do not. 6 $12.5 million loan to make improvements when its only
7 (The above-referred-to document was marked as 7 contractual obligation was to make $2.5 million in
8 50(h) Exhibit 10 for identification. as of this date.) 8 improvements-1
9 Q I'm providing you with a document that has 9 A My understanding was that those $2.5 million
10 been marked as 50(h) Exhibit 10 which is entitled Amendment 10 improvements were already made and that the proceeds from
11 to Concession Agreement. And it is dated on the signature 11 our loan was being used to make additional payments.
12 page as of -- there are a variety of dates between 12 Q Was it your understanding that the proceeds
13 June I9th and June 22nd of 2012. Do you recognize this 13 from Phoenix's loan were being used to make improvements
14 document? 14 that were not required to be made pursuant to S.R.B.
15 A ldo. 15 Concession's agreement with the town?
16 Q Do you recognize this as the purported 16 A That's my understanding.
17 amendment to the S.R.B. Concession agreement'' 17 Q So your understanding is that the entirety of
18 A Yes. 18 the proceeds were being used to make improvements that were
19 Q And this is the amendment that pertained to 19 not required as part of the S.R.B. Concession's agreement
20 the financing from June of2012; correct? 20 with the town'1
21 A Correct. 21 A Correct.
22 Q You see that in this agreement. there are some 22 Q I think I asked you this before.
23 whereas clauses at the outset? 23 Do you recall what the actual funded amount
24 A Yes. 24 out of this loan was''
25 Q Is this an agreement that you reviewed at the 25 A I don't have that. I don't recall the exact
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amount off the top of my head. It's something I have back A No.
2 at the office. 2 Q So the full scope of your diligence with
3 Q What do you recall being told at the time with 3 respect to your compliance to the prior agreement was
4 respect to the restaurant construction project that was 4 simply whether they had payments to date?
5 going to be undertaken with the funded amounts? 5 A Yeah.
6 A Can you repeat that again? 6 Q If you would tum to the third page of this
7 Q Sure. 7 document in the section of the agreement that is Enumerated
8 What do you recall being told at the time 8 No. 3, do you recognize this as similar in form to the
9 about the improvement project that was going to be 9 provision that we looked at in the prior amendment for the
10 undertaken with the funds? 10 November 2011 transaction?
II A I think it was just general refurbishing II A ldo.
12 project including adding additional equipment and new 12 Q And this has a similar definition of
13 equipment into the kitchen and making improvements to the 13 termination payment that would be due upon any default by
14 beach facility. 14 S.R.B. Concession of its obligations to NDH or Phoenix;
15 Q Did anyone describe for you a project that 15 correct?
16 seemed commensurate in size with the size of the financing 16 A Yes.
17 that you were providing? 17 Q And the obligation of the town would be to
18 A I don't recall. 18 make a termination payment that would include all amounts
19 Q So you don't recall whether there was a 19 due under the loan agreement; correct?
20 project that was described to you that sounded like it 20 A Yes.
21 could use $10 million worth of financing to complete? 21 Q And if you would tum to the next page, do you
22 A I just don't remember. 22 see that in the next provision. there is, similar to the
23 Q Do you recall whether that was an issue that 23 prior amendment. a provision that concerns what the payment
24 was part of Phoenix's due diligence. to ensure that the 24 obligation of the town would be where the town decides to
25 scope of the described project was commensurate with the 25 terminate the concession agreement?
Page 111 Page 113
I amount of financing that was being requested'l I A Yes.
2 A Our due diligence was really focused on the 2 Q And this is generally similar in form to the
3 Town of Oyster Bay. So we didn't really focus in on -- I 3 provision that we looked at in the prior amendment:
4 didn't focus in on. you know, how much did this cost. that 4 correct?
5 cost. what was the total cost of the project. 5 A Yes. it is.
6 Q Just to be clear. your due diligence did not 6 Q If you would look at where it provides the
7 include diligence into whether the amount of the financing 7 calculation of the termination payment in the last sentence
8 was commensurate with the scope of the project that was 8 of Subpart 2. where it states. "Said termination payment
9 being described; correct'l 9 shall be an amount equal to the greater of." do you
10 A Right. IO recognize that as a change from the prior amendment where
II Q Did the diligence that was undertaken by II the prior amendment did not have greater of two things: the
12 Phoenix at the time that it agreed to extend the 12 prior amendment simply referred to the calculation of the
13 $12.5 million loan include any diligence into whether 13 5 percent of value per year left on the contract?
14 Mr. Singh and S.R.B. Convention was in full compliance with 14 A Yes.
15 its obligations under the prior loan that had been entered 15 Q And do you have an understanding as to why the
16 into set amongst before? 16 calculation was changed here to make it the greater of that
17 A What do you mean by "in compliance"? 17 amount or something defined as the default amount?
18 Q Had they satisfied all of their obligations 18 A What was the first part of your question?
19 under the prior agreement? 19 Q Do you have an understanding as to why this
20 A Such as like they were current on our 20 provision was modified from the provision in the prior
21 payments. 21 amendment to now make it the greater of the default amount
22 Q Other than being current on their payments. 22 or that calculation?
23 did your diligence include any diligence around whether 23 A I don't know.
24 they had complied with any other provisions of those 24 Q Do you see that the default amount is defined
25 agreements? 25 at the top of the page as including all amounts due under
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the concession agreement? I investigation performed by Phoenix with respect to the
2 A Okay. 2 value of the existing improvements in place?
3 Q Strike that. 3 A No. I don't.
4 That it includes all amounts due under the 4 Q If you would please turn to the signature page
5 loan agreement. 5 of this document. the first signature page. that includes
6 A Yeah. 6 what appears to be a signature from Leonard Genova. do you
7 Q So the effect of this provision would be to 7 have any personal knowledge as to whether Mr. Genova. in
8 ensure that under any circumstances regardless of the value 8 fact. signed this document?
9 of improvements in place. that a termination payment would 9 A I do not.
IO include at least the full amount due under the loan: IO (The above-referred-to document was marked as
11 correct? 11 S0(h) Exhibit 11 for identification. as of this date.)
12 A Correct. 12 Q I'm showing you a document that has been
13 Q And so the payment might be greater than the 13 marked as Exhibit S0(h) 11 which is entitled Term Loan.
14 value of the improvements in place if the town were to 14 Prejudice and Security Agreement and is dated as of
15 terminate S.R.B. Concession: correct? IS June 22nd. 2012. Do you recognize this document?
16 A Correct. 16 A I do.
17 Q Do you have any recollection as to why this 17 Q Do you recognize this as the loan agreement
18 modification was made? 18 forthe financing for S.R.B. Concession?
19 A I don't recall. 19 A Yes.
20 Q Do you recall having an understanding that. in 20 Q Do you see under the definition sections. the
21 fact. the value of the improvements in place were 21 definition of borrower note and C refers to an interest
22 substantially lower than the obligation to Phoenix under 22 rate of 8.88 percent'?
23 the loan? 23 A Yes.
24 A Yes. 24 Q Is that consistent with your understanding as
25 Q And that if you had a calculation that was 25 to the interest rate under this loan?
Page 115 Page 117
I tied purely to the value of the improvements in place. that A Yes.
2 that would not be sufficient to backstop the full loan? 2 Q Is it also correct that that interest rate
3 A I understand that. 3 effectively starts getting paid on the borrowed amount as
4 Q Do you have a recollection of that being an 4 of the date of closing?
5 issue when this agreement was negotiated? 5 A Yes.
6 A I just don't recall. honestly. This is what? 6 Q If you would tum to page 3. the bottom of
7 Four years ago. 7 page 2. do you see that there's a loan of interest section.
8 Q Do you see another modification. is that there 8 and Subpart A is agreement to make loan. which refers to
9 is no stipulation in this document as to the value of the 9 $12.3 million loan. and states at the top of page 3. "The
IO improvements in place? Do you recall the prior agreement 10 loan proceeds shall be disbursed in accordance with
11 that had a provision that stated that the improvements 11 instructions to be provided by borrower to lender."
12 would be deemed to be $10 million? 12 Do you recall. in fact. how the proceeds of
13 A I recall the prior agreement. yes. 13 this loan were disbursed?
14 Q Do you see that there's no parallel provision 14 A It was one closing lump sum.
15 in this agreement? 15 Q So the full amount was disbursed on closing:
16 A Yes. 16 is that correct?
17 Q Do you have an understanding as to why there 17 A Right.
18 was no provision in this agreement providing for what the 18 Q And. in etlect. Mr. Singh and S.R.B.
19 value of the improvements were in place? 19 Concession started paying interest on the borrowed amount
20 A Don't know. 20 as of that date: correct?
21 Q Do you recall having any understanding as to 21 A Yes.
22 what the value of the improvements were that had actually 22 Q Your understanding is that the $12.5 million
23 been completed? 23 loan was being used for purposes of a construction project;
24 A I don't. 24 correct?
25 Q Do you recall whether there was any 25 A Yes.
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I Q And that that construction project would start loan facility.
2 when? 2 Q Did it occur to you at the time as to whether
3 A Upon shortly after closing. 3 it made any sense that Mr. Singh wanted all of these funds
4 Q You said you had some prior experience with 4 in one lump sum and to start paying interest on them all
5 construction loan documents where there were milestones 5 right away for funds that he was purporting to use for a
6 that were required for draws on the construction loan: 6 construction project that would be needed over time?
7 right? 7 A There was some conversations with NDH Capital
8 A Right. 8 about that. But I just don't recall what transpired in
9 Q Is it correct that to your understanding that 9 that conversation.
10 one of the reasons why construction loans are structured 10 Q Who did you talk to about that in NDH Capital?
11 that way. is because the borrower doesn't want to pay money) I A Scott Haber.
12 on money it's borrowing. doesn't want to pay interest until 12 Q Who raised that question?
13 such time it needs the money? 13 A He did because he was suggesting-- he came
14 A Right. 14 out and said. you know, as opposed to drawdowns.just
15 Q And when you do construction. you don't need 15 have -- Singh would prefer to have one funding all at once.
16 all of the money upfront: you need it over time: correct? 16 Q So prior to that time. had there been a
17 A Right. 17 discussion about structuring this loan with drawdowns?
18 Q Here, Mr. Singh was indicating to you that he 18 A No. no. It was all part of the original
19 wanted to borrow $12 million in order to undertake a 19 conversations about this loan. that even though it was for
20 construction project. 20 improvements. Mr. Singh wanted the full amount upfront.
21 Did it occur to you at the time to ask why he 21 Q Did Mr. Haber provide you any explanation as
22 wanted this all in a lump sum. such that he would have to 22 to why Mr. Singh wanted funds upfront?
23 start paying interest on it immediately? 23 A He didn't want to deal with drawdowns.
24 A I don't recall if I asked him that. 24 Q Is there any explanation as to why he didn't
25 Q 8.88 percent is a high interest rate. isn't 25 want to deal with drawdowns?
Page 119 Page 121

it? A No. I don't recall. I don't remember.
2 A Interest rates are all relevant. They're 2 Q Did Mr. Haber indicate to you that he found
3 priced off of U.S. treasury yields which change over time. 3 that at all strange. that Mr. Singh wanted a lump sum
4 I don't know what the yield curve was back in 2012 for a 4 disbursement?
5 transaction like this. 5 A No.
6 " Q Did you ask at the time why if these funds 6 THE WITNESS: Can I say something off the
7 were being used for a construction project. Mr. Singh 7 record?
8 wanted to structure this loan. such that he would be paying 8 MR. FRECHETTE: Off the record.
9 interest on the full $12 million amount immediately as 9 (A discussion was held off the record.)
IO opposed to when he would reasonably need the funds? I0 Q If you would turn to page 5. Conditions
11 MR. FRECHETTE: Asked and answered just one 11 Precedent. it's your understanding that all of these
12 question ago. 12 conditions precedent were satisfied?
13 A I don't recall. 13 A l relied on counsel to tell me that or to
14 Q You don't recall whether that question was 14 certify or whatever. to advise that they were all met.
15 asked? 15 especially outside counsel.
16 A
No. I don't recall whether I asked him why he 16 Q Do you know whether an incumbency certificate
17 wanted it all upfront. 17 was provided by the town. indicating Mr. Genova was
18 Q Did it occur to you at the time that it was 18 authorized to execute this document?
19 unusual to have a loan for construction where someone 19 A Again. I'm a business person. not a la\\'yer.
20 wanted a $ I 2 million loan when you wouldn't expect all 20 It's part of the conditions precedent. I'm assuming the
21 those proceeds would be needed right away? 21 lawyers got all that.
22 MR. FRECHETTE: I object. You keep calling it 22 Q If you would tum to page 8. do you see that
23 a loan for construction. This was not a construction 23 starting at the bottom. actually of page 7. there's a
24 loan. It might have been stated that proceeds were to 24 Section K. Foreign Assets Control Regulations. et cetera.
25 be used for construction. This was not a construction 25 that has similar three bullet points to what we looked at
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previously? document?
2 A Yes. 2 A No. I do not.
3 Q The third bullet point is use of proceeds. 3 (The above-reterred-to document was marked as
4 And it includes a provision that says. "All proceeds from 4 SO(h) Exhibit 13 for identification. as of this date.)
5 the loan shall be used in the observance and performance of 5 Q I'm showing you a document that's been marked
6 borrower's obligations under the concession agreement." 6 as 50( h) Exhibit 13. which is entitled Notice and
7 A Yes. 7 Acknowledgment of Assignment. and is dated as of June 22nd.
8 Q ls it correctthat at the time. it was your 8 2012.
9 understanding that all of the proceeds were going to be 9 Do you recognize this as the notice and
IO used for improvements that were not obligations under the 10 acknowledgment of assignment that is similar in form to the
11 concession agreement? 11 one we looked at in connection with the prior financing?
12 A Yes. 12 A Yes. I do.
13 Q So you did not expect or you did not have an 13 Q Do you see in this notice and acknowledgment
14 understanding that this obligation of the agreement would 14 of assignment. one of the things that the borrower was
15 be satisfied? 15 certifying to as Enumerated No. 2. is that the borrower
16 A I took it to mean that he would satisty the 16 would use the proceeds of the loan to satisfy its
17 requirements under the concession agreement. plus the other 17 obligations under the concession agreements?
18 improvements that he wanted to make. 18 A Yes.
19 Q It was your understanding at the time that 19 Q Did Phoenix undertake any efforts to monitor
20 there were no further obligations for improvements under 20 or ensure compliance with this contractual obligation of
21 the concession agreement: correct? 21 S.R.B. Concession'?
22 A Under the concession agreement. no. correct. 22 A No.
23 Q Did Phoenix undertake any efforts to ensure 23 Q Has it at any point notified S.R.B. Concession
24 that amounts that were extended pursuant to this loan were 24 that it was in breach of its obligation to use the funds
25 used for the stated purpose of improvements made at Tobay 25 that were extended to it by Phoenix to satisfy obligations
Page 123 Page 125
Beach? under the concession agreement?
2 A We did not. 2 A l didn't realize there was a breach.
3 Q Is it also correct that at the time you agreed 3 Q When you say you didn't realize there was a
4 to extend this loan. you did not confirm whether S.R.B. 4 breach. do you mean until you heard the words come out of
5 Convention was in compliance with a parallel provision that 5 my mouth?
6 existed in the loan agreement that they had entered into 6 MR. FRECHETTE: Wait a minute. objection.
7 with the financing from November 2011? 7 That assumes facts not in evidence. They have every
8 A That's correct. 8 right to waive the provisions of their contract if they
9 (The above-referred-to document was marked as 9 elect to.
10 50(h) Exhibit 12 for identification. as of this date.) IO Q Prior to walking in today. did you have any
11 Q I'm providing you with a document that has 11 knowledge that Mr. Singh and the S.R.B. entities did not
12 been marked as S0(h) Exhibit 12 which is entitled 12 use the funds that were extended to them by Phoenix to
13 Assignment of Concession Agreement Proceeds. It's dated as 13 create improvements at Oyster Bay town facilities?
14 of June 22nd. 2012. 14 A So there's a dollar amount on the concession
15 Do you recognize this document as an 15 agreement. And l was not aware that if they made
16 assignment of concession agreement proceeds that's similar 16 additional improvements. that it would be a breach of that
I 7 in form to the assignment of concession agreement proceeds 17 contract.
18 that we looked at from the prior financing? 18 Q I understand that. And I'm asking you a
19 A ldo. 19 separate question.
20 Q lfyou would please tum to the signature 20 A Okay.
21 page. do you see the signature that purports to be the 21 Q Do you have any personal knowledge. sitting
22 signature of Leonard Genova> 22 here today. as to whether Mr. Singh and the S.R.B. entities
23 A Yes. 23 used the funds that were extended to them by Phoenix to
24 Q Do you have any personal knowledge as to 24 make improvements to town facilities?
25 whether, in fact. Mr. Genova atlixed his signature to this 25 A No.
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I Q And is it correct that up until today. that Q What's the convention as to having your
2 Phoenix has not undertaken any investigation or review in 2 initials appear next to the signature block?
3 order to determine whether any of the funds that were 3 A It's my transaction on the business side. We
4 extended by it to the S.R.B. entities were used to improve 4 also have an internal rule that the business people can't
5 town facilities? 5 sign their own deals. You have to have another person
6 A Correct. 6 within the group sign the documents.
7 Q Why not? 7 Q So where your initials appear. would that have
8 MR. FRECHETTE: Hold on. I don't think that 8 actually been you aflixing your initials?
9 goes to the issue of the occurrence of our claim or the 9 A Yes.
10 extent of the injuries. If you can tell me how it 10 Q So would you expect to find your initials next
11 does -- 11 to all the signature blocks that appear on this
12 MR. PICKHARDT: It goes to questions 12 transaction?
13 surrounding mitigation. 13 A Not necessarily all of them. depending on
14 Q Why hasn't Phoenix at any point undertaken to 14 whether or not I was available or it could be someone else
15 investigate whether any of the funds were used for purposes 15 in our shop.
16 of creating improvements to town facilities? 16 Q Is Mr. Beers still employed by Phoenix?
17 MR. FRECHETTE: I don't see how that goes to 17 A No.
18 mitigation. I'm going to let him answer. But I have 18 Q When did he leave?
19 an objection. Go ahead. 19 A Last week.
20 A State the question again. please. 20 Q How about Mr. Buck?
21 Q Why has Phoenix not undertaken any efforts to 21 A He's still employed.
22 investigate whether any of the funds that it extended to 22 (The above-referred-to document was marked as
23 the S.R.B. entities were used for the stated purposes of 23 S0(h) Exhibit 14 for identification. as of this date.)
24 making improvements to town facilities? 24 Q I'm showing you a document that has been
25 A Again. we underwrote this transaction with the 25 marked as 50(h) Exhibit 14. This is dated June 22nd. 2012.
Page 127 Page 129

backing of the TO\~n of Oyster Bay. And we viewed them as I'll just note for the record that -- it's dated as of
2 our ultimate source of repayment. 2 June 22nd. 20 12. I' II note for the record that the same
3 Q This document is signed on behalfof Phoenix 3 agreement appears on two pages. simply because it's a
4 Life Insurance Company. what appears to be a John Beers. 4 one-page agreement. And there's ditlerent signatures on
5 Do you see that? 5 the two pages. Do you recognize this document?
6 A ldo. 6 A Yes.
7 Q Who is Mr. Beers? 7 Q What is it?
8 A He at the time was internal counsel for 8 A It's a cross default provision.
9 Phoenix Life Insurance Company. 9 Q What's the purpose of a cross default
IO Q Do you have any knowledge as to why it was 10 provision?
11 Mr. Beers that was executing this on behalf of Phoenix Lite 11 A lfhe defaults on one loan. it's an automatic
12 Insurance Company? 12 default to the other loan.
13 A Typically in these documents. ifa business 13 Q Do you recall this document being something
14 person or a senior manager within our group is not 14 that was requested by Phoenix?
15 available, then someone else would sign this. But I can't I5 A I don't recall that.
16 think of another reason besides that. 16 Q So you don't recall who made the suggestion
17 Q There's a notation next to the signature 17 that there be a cross default acknowledgment?
18 block. Do you know what that is? 18 A To me. this would be a standard document. If
19 A My initial and probably Brad Buck's initial. 19 we have more than one loan to the obligor. then you would
20 Q So that's your initial on there'? 20 have this cross default document. So it may have been
21 A NC is my initial. And the other one is Brad 21 suggested by our outside counsel.
22 Buck. our internal counsel. He would normally get someone 22 Q This document is signed on behalf of PHL
23 else in the group to sign it or the chief investment 23 Variable Insurance Company by Mr. Beers again. Do you see
24 otlicer to sign it. They probably weren't available. So 24 that?
25 he just got John to sign it. 25 A Yes.
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l Q And there are initials in the margins. Are already covered this. But you don't have any personal
2 those your initials? 2 knowledge as to whether Mr. Genova. in fact. signed any of
3 A One of them. yes. 3 the documents: correct?
4 Q And you believe that you actually affixed 4 MR. FRECHETTE: Other than the notary
5 those initials to this page? 5 acknowledgment?
6 A Yes. 6 MR. PICKHARDT: Yes.
7 Q Do you have any recollection of where you were 7 MR. FRECHETTE: Go ahead.
8 when you affixed your initials? 8 A No. I don't.
9 A Probably in my office. 9 Q Paragraph 4 describes: "The items of damage
10 Q Were you in the presence of any of the other 10 that are claimed which is described as money damages in an
11 signatories to the document when you affixed your initials. 11 amount to be determined but believed to include at least
12 to your recollection? 12 past due payments with default interest. attorneys' fees
13 A It would be signed in front of Brad Buck. But 13 with default interest and the prepayment amount as per the
14 he's initialing it there. He's not signing it. 14 pertinent agreements in the amounts specified in the
15 Q I take it you were not in the presence of 15 attached notices of acceleration." Do you know as of today
16 Mr. Singh or Mr. Genova: is that correct? 16 what any of those amounts are?
17 A No. I was not. I'm sorry. that's correct. 17 A As of today. no. I do not.
18 Q Do you have any knowledge as to whether the 18 Q Are you able to estimate what the total
19 signature of Mr. Genova here was actually affixed by him? 19 amounts are that Phoenix is contending would constitute the
20 A No, I do not. 20 money damages in this case?
21 MR. PICKHARDT: Off the record. 21 A I believe it was in one of the other documents
22 (A short recess was taken.) 22 as of June.
23 Q If you can turn back to what was marked as 23 Q You're talking about the letters that were
24 Exhibit I. you recognize this again as the amended notice 24 attached?
25 of claim which you signed the verification of? 25 A We've included the numbers in the notices to
Page 131 Page 133

A Yes. the town. We've made those calculations as of the date
2 Q If you would turn to page 2. do you see in the 2 that the notices \vere sent. There's several numbers.
3 paragraph that starts at the bottom of the page where it 3 There's a principal prepaid amount, default interest. past
4 states: "On or about June 16th.2015, Tobay advised NOH by 4 due interest. There's multiple numbers. I don't have
5 several letters that inter alia. One. Harris Beach was 5 those off the top of my head. But they're referencing
6 never authorized to represent Tobay in connection with the 6 notices that we sent to the town.
7 opinion letters." I'm going to stop on that. 7 Q These are the notices that were provided by
8 Do you have any personal knowledge as to 8 Mr. Frechette?
9 whether Harris Beach was ever authorized to act on behalf 9 MR. FRECHETTE: Let the record reflect that
10 ofTobay? IO I'm showing the witness Exhibit I and specifically
11 MR. FRECHETTE: Asked and answered. Go ahead. II page 3 of the August 5. 20 15 letter, addressed to
12 A No. 12 S.R.B. Concession, Inc.
13 Q And then Two." All four opinion letters were 13 Q What amount is reterenced there?
14 incorrect about the validity and enforceability of the 14 A $8.763.999.82.
15 amendments and assignments." 15 Q Is that the amount under one loan or both
16 Do you have any personal knowledge as to 16 loans?
17 whether the opinion letters were incorrect about the 17 A It was under the acceleration notice to S.R.B.
18 validity and enforceability of the amendments and 18 Concession.
19 assignments? 19 Q And the corresponding amount under the S.R.B.
20 A No. 20 convention letter is 5.5 million. approximately; is that
21 MR. FRECHETTE: I'm going to object. That 21 correct?
22 calls for a legal conclusion. Go ahead. 22 A 5.5 million. correct.
23 A No. I don't. 23 Q Do you know whether the amounts as of today is
24 Q It goes on to say. "However. the amounts and 24 higher or lower than these numbers?
25 assignments were signed by the town attorney." I think we 25 A They would be higher. Well. these letters
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were dated as of August 15th. So we've got additional I Q Have you had any discussions with Mr. Haber
2 mispayments and default interest. Well, we had -- 2 about whether he fully disclosed to Phoenix all of the
3 MR. PICKHARDT: Let's not forget the tees 3 information he had concerning the S.R.B. entities or
4 A And the fees. And we have additional default 4 Mr. Singh?
5 interest. Since no payments have been made since last 5 A What kind of information are we talking about?
6 June, I'm assuming the amount was higher just due to pay 6 Q You understand that Mr. Singh has now been
7 accrued and unpaid default interest rate. 7 indicted and is in jail?
8 Q Can you describe what etforts have been 8 A Sure.
9 undertaken by Phoenix to mitigate its damages in respect of 9 Q The question is whether you've had any
10 the loans to the S.R.B. entities') IO discussions with Mr. Haber about whether he should have
11 MR. FRECHETTE: Calls for a legal conclusion. 11 made greater disclosure to you about information that he
12 Go ahead and answer if you can. 12 was aware of in connection with the S. R. 8. entities or
13 A Well, we've hired outside counsel. We've sent 13 Mr. Singh.
14 notices of acceleration. We've tried negotiating with a 14 MR. FRECHETTE: How does that go to the
15 third-party investor group to assume the obligations. And 15 existence of our claims?
16 those negotiations. even though they've gone on for many 16 MR. PICKHARDT: Mitigation.
17 months, have really reaped the result that would help us in 17 MR. FRECHETTE: No. How does that mitigate a
18 the recovery of our obligations. balances. 18 claim. an obligation to make a termination payment?
19 Q Have you had any discussions with Mr. Haber 19 MR. PICKHARDT: If you have potential claims
20 about the fact that these loans were defaulted on') 20 against Mr. Haber. I want to know whether you've
21 A Yes. 21 explored all the claims.
22 Q And what discussions have you had with 22 MR. FRECHETTE: I have no objection. Go
23 Mr. Haber on that topic? 23 ahead.
24 A He was aware that -- well. he's been aware 24 A Just so I understand your question, are you
25 from the get-go because when the loans -- when the payments 25 referring to when the process started upfront?
Page 135 Page 137
I stopped being made. we had that conversation. And he was Q Since there's been a default and you realized
2 made aware of it. And you should know that before the 2 there are problems on the loans and Mr. Singh's more
3 payments stopped. that Mr. Singh was running late on some 3 serious problems have come to light. have you had any
4 of his payments. 4 discussions with Mr. Haber about whether he should have
5 So I was reaching out directly to Mr. Singh at 5 undertaken additional diligence, NDH should have taken
,, 6 that point in time to work something out to give him some 6 undertaken additional diligence or disclosed additional
' 7 grace period. if you will. if he needed it. until his 7 information to Phoenix in connection with the origination
8 business recovered. And we did that for several months. 8 of these loans?
9 Q Does Mr. Haber have any continuing interest in 9 A We had one conversation where he was as
IO the loans? 10 shocked as we were about what transpired with Mr. Singh and
II A No. 11 his indictment.
12 MR. FRECHETTE: Objection. Mr. Haber never 12 (Continued on the following page.)
13 had an interest in the loans. 13
14 Q Mr. Haber received some compensation. NDH 14
15 Capital received some compensation in connection with the 15
16 loans~ correct? 16
17 A Right. 17
18 Q All of that composition was upfront is that 18
19 correct? 19
20 A Yes. 20
21 Q So he has no continuing benefits or NDH 21
22 Capital gets no continuing benefit? 22
23 A No. Sometimes the broker gets involved in 23
24 late payment situations to provide assistance with the 24
25 borrower and the ultimate investor. 25
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I Q How about Mr. Edelstein? I INDEX (Cont.)
2 A I've never had a business relationship with 2 50(h) Exhibit 11 Term loan. 116
pledge and
3 him. It's been through N DH Capital.
3 security
4 Q Did Mr. Haber ever disclose to you that agreement
5 Mr. Edelstein believed that an additional town board 4
6 resolution was required in order to authorize the loans 50(h) Exhibit 12 Assignment of 123
7 that were being extended? 5 concession
8 MR. FRECHETTE: Objection: assumes facts not agreement
9 in evidence. You can go ahead and answer. 6 proceeds
7 50(h) Exhibit 13 Notice and 124
IO A No. I don't. acknowledgment
11 MR. PICKHARDT: I have no further questions. 8 of assignment
12 (Time noted: 3:00 p.m.) 9 50(h) Exhibit 14 Cross default 128
13 acknowledgment
14 10
NELSON CORREA II
15 12
13
16 14
17 Subscribed and sworn to 15
18 before me on this _ _ _day 16
19 of _ _ _ _ _ _ _ _. 2016. 17
20 18
19
21 NOTARY PUBLIC 20
21
22 22
23 23
24 24
25 25
Page 139 Page 141
CERTIFICATION
2 IN DEX
2
3
4 EXAMINATION 3
5 EXAMINATION 4 I. ANTHONY GIARRO. a Shorthand Reporter and a Notary
6 Mr. Pickhardt 3 5 Public. do hereby certify that the foregoing witness.
7 6 NELSON CORREA. was duly sworn on the date indicated. and,
8 EXHIBfTS
7 that the foregoing. to the best of my ability. is a true
9 S0(h) Description Page
10 S0(h) Exhibit I Atlirmation 3 8 and accurate transcription of my stenographic notes.
11 S0(h) Exhibit 2 Letter 63 9 I further certify that I am not employed by nor
12 S0(h) Exhibit 3 Letter 68 10 related to any party to this action.
13 S0(h) Exhibit 4 Amendment to 70
11
concession
14 agreement 12
15 S0(h) Exhibit 5 Term loan. 82 13
pledge and
16 security
14 ANTHONY GIARRO
agreement
17 15
S0(h) Exhibit 6 Assignment of 92 16
18 concession 17
agreement 18
19 process
20 S0(h) Exhibit 7 Notice and 99 19
acknowledgment 20
21 of assignment 21
22 S0(h) Exhibit 8 Letter 104 22
23 S0(h) Exhibit 9 Letter 106
24 S0(h) Exhibit 10 Amendment to
23
107
concession 24
25 agreement 25
36 (Pages 138- 141)

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Page 142
ERRATA SHEET
VERITEXT/NEW YORK REPORTING. LLC
2 1-800-727-6396
3 330 Old Country Road 1250 Broadway
Mineola. NY 11501 New York. New York 10001
4
NAME OF CASE: Phoenix and PHL versus The Town of Oyster
5 Bay
DATE OF DEPOSITION: July 12. 2016
6 NAME OF DEPONENT: Nelson Correa
7
PAGE LINE (S) CHANGE REASON
8
9
10
II
12
13
14
15
16
17
18
19
20
NELSON CORREA
21
22 SUBSCRIBED AND SWORN TO BEFORE ME
THIS DAYOF _ _ _ _,2016.
23
24
(NOTARY PUBLIC) MY COMMISSION EXPIRES:
25
37(Page 142)
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I09:6 1 11 : 13 77:24 139:20,22,23,24
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acknowledges 94:12
123 140:4 21 84:24 50h 1:14
acknowledgment
124 140:7 21st 104:21 51 1:17 2:8 80: 12 81 :4,6,22
1250 142:3 22nd 2:8 106:13 6 99:9,18 100:16,19
128 140:9 107:13 116:15 6 92: 14, 16 13 9: I 7 101:4124:7,10,13
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14 128:23,25 140:9 128:25 129:2 68 139:12 139:20 140:7,9
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15th 134:1 86:2 act 43:18 13 I :9

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[action - asking] Page 2
action 66: IO 141: I 0 70: 13, 19 72:21,25 13:1015:9,1731:13 138:9

actions 59: 11 73: 10,24 74:9, I 4, I 6 64: 17 130:24 answered 69: 14
actual 36: I 79: 12,23 75:3, 17, I 8,24 76:6 amendment 70: 12 119:11131:11
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9:12 I 0:3 49:4,7 65: 11 111 :25 47:21 49:21 74:24 approximately 21 :7
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13:25 14:1 24:8 104:17 68:11 72:1 75:13 26:3,4,6 70:25
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[assess - binding] Page 3
assess 48: 14 132: 12 104: I 5 I IO: 1 1 19: 4 60: I 7 63:20 64: 1,22
assessed 49: 18 attractive 50: 15,20 130:23 65: I 7,25 66:4, 12, 17
assessing 17 :22 50:21,22,25 backed 25:12 44:5 66:21,24 67: I ,6,21
79:12 audited 103:22 53:6 61:991 :24 69:5,21 71:17
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assessors 65 :4 134: 1 backing 15:3 23:1,8 105:18 106:6 108:9
assets 5:2,3 10:22 authorities 43: 1,2 23: 11 25:6, 15,22 1 10: 14 123: I 13 I :5
87:25 121 :24 authority 14:25 26:6, 12,25 29:23 I 3 I :9
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83:16 85:19,23 93:1 97:25 127: I 105:23
93:10 99:19 authorize 45:2 63:4 backstop I 5:4 22:22 beaches 55:8 58: 16
assignee 67: 19 138:6 25:20 40:2 104:8 bear 76:25
assignment 92: 16 authorized 44:23 115:2 beers 127:4,7,11
93:3, 7,8,8, 12, 15,20 45: 12, 15 70: 1 87: 15 backstopped 56: 19 128: 16 129:23
96:25 97:4,7, 14, 19 87: 17,22 121: 18 balances 134: 18 behalf I: I 3 23: I 9
98: 16 99:9 100: 16 131:6,9 bank 52:13 103:13 32:15 34:8 39:5
100:19101:4,13,l6 authorizing 43:22 bar 37: 11 5 I :8 60: 12 66:21
123:13,16,17 124:7 62:19,22 66:1 based 52:14,17 53:3 94:22 99:11,12
124:10,14 139:17 automatic 129:11 53:8 77:16 127:3,11 129:22
139:21 140:4,8 available 43: 11, 14 basis 22:5,8 67:8, IO I 3 I :9
assignments 97: I 0 127:15,24 128:14 67:12 96:10 belief 6:12 86:7
13 I : I 5, I 9,2 5 avenue 1:172:8 bay 1:72:73:155:7 believe 33:11,20
assignor's 94: I4 average 50:1 I 6:4 8:7,8,16 13:20 36:22 48:4 58:12
assigns 65:4 69:24 avoid 31: 1 13:24 17:6 20:20 59:4 61: 13 62: 17
assistance 135:24 aware 35:10 55:14 22:21,25 23:16,19 64:5 85:12 86:6
associates 36:3 55:18 62:9 66:15,16 23:25 25:15,20 26:5 99:21 100:6 130:4
assume 46:7 134:15 66: 19,25 68: 13 27:9, 16,24 29:5 132:21
assumed 45:8 66:3,5 72:24 73:8 79:14,18 31:2,11 34:9,25 believed 28:10
89:22 90:4. 90:2591:1,7,11,14 35:8,11,17,20,22 132:11 138:5
assumes 43:24 67:7 9 I: 15, 19 96:6,25 36:2 39: 14, 18 40:3 benefit 15: l 27:8
80:6 82: 13 96: 1 97:12101:11106:8 41:543:6,9,15,18 31:1764:1894:13
125:7 138:8 125:15 134:24,24 45:23 46:10 50:18 94:17,24 95:6,11,15
assuming 46:4 135 :2 136: 12 53:6,21 55:8 56:20 95 :25 96:6 97: 14
57:17 86:17121:20 b 57:24 61 :9 65:9, 11 135:22
134:6 65:23 66:6 70:7 benefits 28:7 95: 17
b 75:18 139:8
assured 86: 18 91:2594:1795:11 135:21
back 9:21 16:17,20
attached 7: 13 96: 17 I 03:5 I 04:8 best 6: 11 I 9:20
21:1 22:20,21 23:10
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23:23 24: 1,2,9 25:5
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51:4 56:21 64:13
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75:9, IO 85:3, 11
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86:3 89:10 98:11
18:23 19:4,6 69:25 56:17 57:15 60:8,13 65:9, 12 69:22
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[bit - closings] Page4
bit 81 :6 127:22 128:20 31:1633:13 34:5,7 check 9:21

block 127: 18 128:2 130: 13 36:8 58:19 63:21 checked 7: l 0
blocks 128: 11 buck's 127: 19 64:18 67:14 68:22 chief 15:25 127:23
board 43: 19,22 44:7 budgets 38:7 60:6 73:5,15 76:14 77:21 church 2:4
44: 13,22 45: 1,6, I0 build 52:22 78:3, 12,22,24 79:3 circumstance 78: l 0
45: 15, 19 48:5,8,9 building 12: 13, 14 79:7, 12, 19 ,23 80:3 96:14
48: 14 49:8, 16,24 12:14 83:8 86:4 92:22 circumstances 14:4
62: 18,22 63:2,3 bullet 121 :25 122:3 93:2 103: 11 I 04:22 14:12 22:7 25:13
66: I 86:22,25 business 13: 17, 18 120:7,10 135:15,22 66:8 69:9 114:8
105: 19,23 138:5 15:18 24:6 25:9,17 138:3 cities 14:24 41 :21
bond 15:4 25:21 26:4,6 30:24 capped 76:16 citizens 15: l
bonds 5:3 14:23 33: 1 38: 11 67:24 care 102:6 claim 1:3 5 :6 6:2, 7
borrow 47:2 118:19 70:2 85 :22 89:22 carryover 78: 15 6:11,15,22 7:3,13
borrowed 117:3, 19 94:9,20 121:19 case 9:21 11 :22 9:911:813:1,10
borrower 84: I 0 127:13 128:3,4 13:21 32: IO 132:20 15:9, 17 31: 13 63:22
I 00:8, 12,21 IO I: 13 135:8 138:2 142:4 64:17 68:24 126:9
103:13,17 116:21 C cases 46: 17 130:25 136: 18
117:11118:11 cash 97:10 claimants 9:6 31: 18
C 2:13:3116:21
124:14,15 135:25 categories 40: 19 claimed 132: l 0
141: I, I
borrower's 88: 11 catering 7: 14,22 claims 136: 15, 19,21
calculated 54: 12
89:2, 15 122:6 8:14 70:14 94:20 clarify 9:2,3
76: 11, 13 77:8 78: 10
borrowers 13 :9 20:6 cause 90:25 classify 5: 12 14:23
calculating 76: 13
IO I :21 I 02: I caution 63:5 68: l 0 clause 72: 18,20 73:2
calculation 113:7, 12
borrowing I I 8: I 2 certain 14:4, 12 17: I 73: 13 83: 19,22
113: 16,22 114:25
bottom 72:19,20 31:9,1244:2,9 108:7
calculations 133: 1
74:22 84:5 117:6 57: 17,20 72:5 74:23 clauses 72: 16
call 10:20 19:24
121 :23 131 :3 83:20 88:3 I 00:8 107:23
24: 14, 16, 17,24 25 :2
brad 17:24 33:6 101:16 105:15 clear 5:13 25:13
28:9,25 29:9, 12, 14
68:3 127: 19,21 certainly 11 :23 33:6 111 :6
29: 17 30: l, 11,23
130: 13 19: 10 62:9 68: 11 client 18:21
41 : 19 ,2 0 46 :4
breach 90:20,25 certificate 87:7,9, 11 close 33: 18 53: 16
called 11: 14 I 5:23
92:8 101:8,11 87: 17,21 103:24 85:18
56:16
124:24 125:2,4,16 121: I 6 closed 33 :8 61 : I I, 14
calling 119:22
break 64: 14 certificates 102: 19 85:23,24
calls 13 : 12 14: 7
bring 7:19 certification 6: 17,24 closing 48:7, 10, 11
25:24 27: 19,20
brings 20:2,6 7:4 103 :25 I 04:3 48: 12, 17,23,24
28: 19,21,23 29: 13
broadway 142:3 certified 86:21 51: 18,20,22 52: 1,3
30:15,16,18,25 35:6
broke 42:16 certify 100:8 121 :14 56:4 61:1863:24
36:21,23 46:3 57:2
broker 20:2,5 141 :5,9 64:2 82:8 84: 15, 18
57:18 58:1 77:10,12
135:23 certifying 124: l 5 84: 19,24 85:3,5, l 0
80:5 90:23 93:23
brought 36:2 cetera 88: l 121 :24 85:12 86:8,19,25
94:6 96:2 131 :22
buck 17:24 18: 1, 11 change 42: 14 63: I 6 92:2 117:4,14,15
134: 11
18: 14 19: 12 31 :25 113: 10 119:3 142:7 118:3
capital 19:25 20:4
32:4,5,22 33:6 changed 56: 12 closings 82 :7
28: 19,20 29: 18
39:17 68:3,7,12,14 105:12 113:16
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[come - convention] Page 5
come 19: 18 26:20 completed 115 :23 concession's I 09: 15 considered 15 :4

41 :22 44:6, 12 54:21 completion 73:15 l 09: 19 considering 40:5
55:23 58: 17 60:9, 13 83:24 concessionaire 9: 15 consistent 41 :25
60:16,19 95:21 compliance 91 : 16 20:22 22:4, 10, 12 73: 17 84:2 116:24
125:4 137:3 102: 13, 19,21,25 51:15,1673:3 74:18 constitute 96: 14
comfortable 31 :9 111:14,17 112:3 108:7 132: 19
68:5 123 :5 124:20 concessionaires construct 52:22
coming 29:2 30: 16 complied 91 :21 9:14 construction 39:23
commensurate 111 :24 concessionary 77 :3 52:7,9, 11,20,25
11 0: 16,2 5 111 :8 comply 89:25 concessions 8:7, 11 53: 4, 7, 9 61 :5,2 1
comments 71 :12 composition 135: 18 8: 16,22,23 9:2 62:191:24110:4
83:6,11,14 comprised 15:24 concisely 81 : 15 117:23 118: 1,5,6, 10
commingled 15:2 concept 22:25 29:5 conclusion 13: 13 11 8: 15 ,2 0 11 9: 7, 19
commission 142:24 29: 16 30:2,20 14: 8 25 :25 77: 11 , 12 119:23,23,25,25
commitment 48: 16 concerned 104:9 90:24 93:24 94:7 120:6
committed 15 :20 concerning 136:3 131 :22 134: 11 consult 18:23 19: 13
committee 15:21,24 concerns 88:6 conditions 85 :2 cont 140: 1
15:24 16:3,3 17:19 112:23 86: 11, 12, 12, 16, 18 contact 15:18 17:13
17:20,21 concession 7: 14,21 121 : 10, 12,20 35:22 36:1,7
committees 16:7 8:5,6, 1 1, 13, 15,24 conference 2 7: 19 contacted 19:5
17:9 18:2 30:21 38:22 44:5 30:25 41: 18 46:3,4 20: 17 21 : 11 56:22
communicate 28: 13 47:21,23 48:8, 19 57:18 contained 69:20
35:6 37:23 49:4, 15,21 55:4, 7 confident 25: 19 contains 81 :4,6
communicated 24:4 55: 12, 19,24 59:6 confirm 39:7 61 :24 contemplated 23 :4
24:11 36: 15 62:14,15 70:13,19 66:8 100:8 103:21 44:14
communicating 72:21,24 73:9,24 123:4 contemporaneously
35:16 74:8, 16 76:6 77: 15 confirmation 62: 12 52:1
communications 78:14 88:12,19,23 ,conflict 66:24 67: 1 contending 132: 19
19:9 35:5 37:2 89:2,9, 12, 16,21 confused 9: 1 contents 6: 10
companies 9:12 90:2,9, 17,21 92: 11 connecticut 2:4 3:10 context 12:3
40:12 92:17 93:5,12,18 4:7, 10 18: 10 41 :23 continued 137: 12
company l :4,4, 14 94:14,2196:2597:4 connection 3:16 5:6 continuing 135:9,21
2:3 4:9 5:3 6:2,3 9:6 97:8,10,14,19 5:7,20 11:11 17:6 135:22
9:7, 18, 19,23 10: 1,6 100: 13,22 10 I :5, 10 17: I 0, 14 18:6 19:6 contract 113: 13
10:7 15:19 41:10 l 04:24 105:7 19: 13 35 :3,24 36: I 0 125:8,17
42:7 4 7:3 99: 13 106:17107:ll,17 40:25 44:14 47:14 contractual 38: 15
l 00:5 127:4,9, 12 l 08:8, I 0, 13,21,24 57:8, 12, 16 58:2 38: 19 I 09:7 124:20
129:23 109:5 112:14,25 62:6 66:22 94:25 control 87:25 91 :25
compare 50: 13 114:1,15 116:18 97:5,17 106:17 121 :24
compared 91 :4 l l 7: 19 122:6, 1 I , 17 124:11131:6 controlled 55:6, 11
compensation 122 :2 I ,22 123: 13 135:15 136:12 convention 7: 14,22
135:14,15 123:16,17124:17 137:7 8:14,24 47:23 48:19
complete 73:21 74:3 124:21,23 125:1,14 consider 41 :2 43 :4 70: 14,19 73:4,9
I 10:21 133:12,18 139:13 56:24 75:24 83:3,19 84:13
139: 18,24 140:5 88: 18 92:8 93:4, 13
212-267-6868 www.veritext.com 516-608-2400
Case 2:16-cr-00540-JMA-SIL ,...... 137 of 255 PageID #: 1778
,.-.._ Document 80 Filed 08/28/17 Page
Case 2:16-cv-04013-SJF-A, .. i- Document 16-2 Filed 12/29/16 , '"'ge 44 of 60 PagelD #: 396
NELSON CORREA
[convention - described] Page 6
96:19 101:8 104:4 107:21 108:18 created 45: 19 83:7 dealings 68: 12, 14
111:14 123:5 128:1 109:21 111:9 creating 24:8 deals 128:5
133:20 112:15,19113:4 126: 16 debate 80:24
conversation 23:3,5 114: 11, 12, 15, 16 creation 83:5 debt 102: 17,23
23:10 58:22 120:9 117:2, I 6,20,24 credit I 1:13,14 I 03: 12
135:1 137:9 118:9,16 122:8,21 12:1017:222:14 december 72:22
conversations 23 :24 122:22 123 :3,8 41 :6 43: I 0, 13 46: 11 77: 1,7
26:12 27:3,14 34:16 126: 1,6 130: 16, 17 cross 129:8,9, 17,20 decides l 12 :24
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59: 12 60:23 120:7 135:16,19 current 7: 19 62: 12 decision 89:22
120: 19 correctly 94:23 111 :20,22 deemed 83:7 92:24
copies 48:5 86:21 correlation 109:2 curve 119:4 115: 12
copy 47:22 48:8,9 corresponding d default 76:25 77:2,6
48:18 99:21 133:19 96: 18 112: 13
d 139:2
corp 7: 15,22 8: 14 cost 38: IO 111 :4,5,5 113:17,21,24 129:8
damage 132:9
70:14 counsel 2:12 3:15,25 129:9, 12, 17,20
damages 132: l 0,20
corporate 5:3 9: I I 4:3,4 17:24 18:5,8 132:12,13 133:3
134:9
corporation 31 : I 7 24:15 27:14,15,16 134:2,4,7 137:1
date 3:2 33:9 57: I 9
41: I 0, I 2, 15 42:2,3 27:23 28:2,20 30:8 140:9
63: 14 68: 17 70: I 0
63:2164:1867:14 31 :6,6 32: 12 33:6 defaulted 74: 18
79:481:2182:19
68:22 I 04:22 40: 16 44:25 45:8,8 75:24 93:21 134:20
84:19,24,24 85:2,3
corporations I 03:4 48:2,3 49:6, 14 defaults 7: 19 129: 11
85:5,10,12 86:3
correa I: 13 3:8, 13 57:21,22 64:14 defense 96: 15
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I 06: I 0 IO 7: 8 I 12 :4
l38:14141:6142:6 71:16,1983:8 92:22 defined 73:3 75:6
I 16:11 117:4,20
142:20 92:23,23 I 00:2,2 113: 17,24
123: l O 124:4
correct 9:23 I0:23 121: 13, 15 127:8,22 definition 112: 12
128:23 133:1 141:6
10:24 12: 18,25 14:2 129:21 134: 13 l 16:20,21
142:5
14:6,11 15:8 17:14 country 41 :21 142:3 delivered 3 1: 17
dated 63: 19 68: 19
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47:24 48:6,20 49:22 court 1:13:616:21 142:5
128:25 129:1 134:1
50:24 52:25 54: 17 26:19 75:11 deputy 32: 12
dates 107:12
55:12 57:12,13 61:6 courtroom 3:23 describe 16:9 37:9
day 8:2, 18 10:4 39:9
61:7,12,15 65:4,5 cover 16: 12 40: 18 44:21 87: 13
96:10,10 138:18
66:9 67:20 71 :25 covered 45 :6,24 I I 0: 15 134:8
142:22
75:7,20 76:11,16,20 132:1 described 6:21
days 69:7 84:24
77:9, 18,22,25 78:3 cplr 81 :3, 16 28:25 37:6 39:9
deal 22:7 31: l 36:9
85:16 88:19 90:12 create 29:20 75:21 47:4,9 68:24 75:2
38: 12 57:5 120:23
93:6,25 94: 1,5 92: IO 95: 18 96:7 110:20,25 I 11 :9
120:25
95:15 98:5 104:1 125:13 132: 10
105:3 I 06:2 l 07:20
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~
~
138 of 255 PageID #: 1779
Case 2:16-cv-04013-SJF-A,, .- Document 16-2 Filed 12/29/16 1 ..1ge 45 of 60 PagelD #: 397
NELSON CORREA
[describes - enhancements] Page 7
describes 132:9 disclosure 136: 11 128:24 129:5, 13, 18 duly 3:370:1141:6

describing 16:7 discount 54: 13, 17 129:20,22 130: 11 e
24: 18 39:24 76:4 discuss 18:21 56: 16 documentation
e 2: 1, 1,5,9 3:3,3
description 60:3 57:2 68:11,13 40: 15,21 4 7: 13, 15
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74:16 139:9 discussed 21: 12 47:17 48:17 57:6
139:4,8 141: 1
desire 11 :23 24:1631:456:9 83:2
earlier 28:9,25 30: 1
detail 5: 17 106:3 documents 7:18
69:3 73 :2 86:24
determine 126:3 discussing 9:3 27:20 14:9 49:16 52:5
edelstein 34:6 35: 19
determined 132: 11 42:16 62:4,7,9 63:22 65: I
35:21 36:6,9 138: I
difference 25 :22 discussion I 7:5 22:2 67: 16, 17 69:21 70: 1
138:5
different 5: 14 9:5 26: 11, 13 30:3 37:22 75:19 81:20 85:1,4
edelstein's 35:24
10:3 41 :4,21,21 38:159:2463:1,7 87: 14 93:2 94:7
edit 83:6
43:12 50:9 51 :11,13 64: 12 69:24 74:6 99: 19 1 18: 5 12 7: 13
edits 71: 12 92:24
54:18 55:7 63:3 78:23 106: 1,20,24 128:6 132:3,21
100:3
64:4,7 80: 12 I 03: 12 120: 17 121 :9 doing 55:21,2461 :8
educate 6: 18,22
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effect 67:6 75:21
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80:23 93:20 94:3,4
differentiation 26:7 31: I 38:3 42:6 47:5 125: 14
114:7 117:18
difficult 29: 14 57:7, 14 58:23 59: I don 80:21 81 :8
effectively 22: 16
diligence 40:4, 13, 19 59:5 63:7,9 134:19 donald 2:5 4:4
94:1 117:3
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efforts 20:25 122:23
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134:8
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either 17:8 35:3
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elect 125:9
48:25 49: 18 61 :25 document 5:22,24 71:10,13,25 92:21
elected 76:6
62:5 65:22 66:7 44:24 48:12 63:13 100: I
emanuel 1:16 2:7
79:18 ,110:24 111:2 63: 18,23 64: I ,7,21 drawdowns 52:14 employed" 4 :8 ,9 9 :22
111 :6,7, 11, 13,23,23 68:16,18 69:18 70:9 52:17 53:3,8 120:14 128:16,21 141:9
112:2 137:5,6 70:11,16,22 71:7,25 120: 17,23,25
endeavored 25: 19
direct 6:20,20 15 :24 72:4 74:14 75:15 draws 118:6
ended 21 :7 25: 10
directed 7: 13 67: 13 77:13 78:16 80:9 due 7:19 14:20
enforce 91: 12 92:3
directly 28: 17 36:9 81: 1,4,25 82:5, 10 15:13 40:4,13,19,22
101 :3
36:11,16 54:1,3 82: 18,20,23 83 :5, 7 41 :9,25 42:5, 17, 19
enforceability 69:22
67:22 135:5 83:12 84:21 85:18 42:22 43:5, 14 44:21
131: 14, 18
director 4: 12 92: 13, 15, 18,21,23 45:22 46: 1, 15,20,24
enforceable 65 :2
disbursed 84:9, 14 96:21 98:9, 12,25 47:5,11,14 48:13,15
70: 1
117:10,13,15 99:5,7, 15,23 100:7 48: 16, 18,21,25
enforcement 101 : 1
disbursement 121 :4 100: 11 104: 13, 19 49: 18 61 :25 62:5
102: 13
discharge 96: 15 I 05:9 I 06:9, 11 65:22 66:7 75:3,6
enforces 102:25
disclaiming 96: 13 107:7,9,14 112:7 75: 18, 19,23 110:24
english 18:9 30:9
97:23 115:9 116:5,8,10,12 111:2,6 112:13,19
enhancements
disclose 138:4 116:15 121:18 113:25114:4,10
26:19 27:7
disclosed 136:2 123:9,11,15 124:1,3 132:12 133:4 134:6
137:6 124:5 127:3 128:22
212-267-6868 www.veritext.com 516-608-2400
~
Case 2:16-cv-04013-SJF-1-... r Document 16-2 Filed 12/29/16 r-dge 46 of 60 PagelD #: 398
NELSON CORREA
[enhancing - falling] Page 8
enhancing 95 :2 equaling 79:8 exhibit 3:2 5:23 extending 38:4

ensure 52:21 53:9 equipment 60:23 63:14,19 64:8 68:17 extent 11 :3,22 26: 1
53:13 91:2092:4 110: 12, 13 68: 19 70: I 0, 12 126: I 0
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ensuring 3 I :7 especially 121: 15 116:11,13 123:10
f 141:1
enter 43:23 44: 13 esq 2:5,9, 12 123: 12 124:4,6
face 36:20,20 46:6,6
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entered 14:17 18:18 establish 80:20 133: 10 139: I0, 11
facilitate 73: 15
18:25 19:14 50:14 estimate 132: 18 139: 12, 13, 15, 17,20
83:24
55:6 97: 13,25 et 88: 1 121 :24 139:22,23,24 140:2
facilities 20:20,21
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20:23,24,25 29:22
entering 65: 12 75:24 76:5 77:2 exist 102:3
38:20 96:8 125: 13
enterprise 40:24 96: 18 existed 44: 17 79: 12
125:24 126:5, 16,24
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enterprises 47:2 eventually 29:20 existence 136: 15
33 :23 34:2, 16 51: 15
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51: 17 52:22 56: 17
entirety I 09: 17 80:6 81:17 82:14 I 08:23 116:2
58: 15 60:8 73:6
entities 5: 14, 19 8: 1 96:2 125:7 138:9 expand 37: 12
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8: 19,20,21 9:5,8, 10 evolved 27:14 expect 103 :24
94:22 95:2,3,9,14
10:15 13:11,22 14:2 exact 21:2227:25 119:20 122:13 108:9 1I 0: 14 120: I
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fact 6:10 40:2 43:1
22:8, 13, 14 23:6 57:3 109:25 expected 37:23
55: 19 64: 15 66:25
24: 1, 10 28:6 46:2 exactly 5: 18 21 :9 expecting 25 :23
67:5 73:8 88: 17
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116:8 117: 12
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123:25 132:2
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factory I 03: I 1
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facts 43:24 67:7
entitled 19:3 70:12 examples I 02:24 expires 142:24
80:6 82: 13 96: 1
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138:8
107:10 116:13 excluded 17:2 120:24
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failed 15: 13 92:9
entity 8:23,24 9:2 execute 121 : 18 extend 9:13,14 42:1
101 :9
21:17 50:16,25 51:3 executed 81 :20 82: I 111:12 123:4
fairly 23: 12 25: 19
55:7,11,19 103:5 108:4 extended 5 :8, I 0, 14
fairness 76:24
enumerated I 00:9 executing 49:3, 7 11:9 12:21 52:3,7
faith 67:8,9
112:7 124:15 127:11 61 :6 72:21,25 86:8 fall 33: 17 36: 15 38:2
enumerator 69: 19 execution 70: 15 92:4,10 108:18
39:9, 15
environment 50: 10 80:8, 16 82:5 85:6 122:24 124:25
falling 40: 19
equal 74:23 113 :9 99:14 100:5 125: 12,23 126:4,22
138:7
212-267-6868 www.veritext.com 516-608-2400
.-.... Document 80 Filed 08/28/17 Page 140 of 255 PageID #: 1781
Case 2:16-cv-04013-SJF-1-... r Document 16-2 Filed 12/29/16 r- dge 47 of 60 PagelD #: 399
NELSON CORREA
[familiar - greater) Page 9
familiar 7: 1 52:9, 12 33:8, 18 36: 15 50:3 87: 12 90:23 93:23 generally 11 :2 16:9
71 :3 54:25 55:6 56:5, 18 94:6 95:7 96: 1,9,20 40: 18 44: 1 71 :5
far 42:13 63:16 56:20 59:15 61 :14 I 19: 11,22 12 1:8 113:2
fashion 35:7 61:18 62:12 63:4 125:6 126:8, 17 genova 82: 12 87: 17
fee 54:9, I 0,20 72:15 98:20 I 13:18 131:11,21132:4,7 87:21 98:21 116:6,7
fees 132: 12 134:3,4 116:5 133:8,9 134:11 121 : 17 123 :22,25
figure I 03 :2 floor 2:8 135:12 136:14,17 130:16,19132:2
filings I 03 :21 flows 97:10 136:22 138:8 genova's 82: 11
final 49:3 99:21 focus 111:3,4 frederick 68 :21 98:24 99:3
finally I 08:4 focused 11 :20 11 I :2 I 06: 15 gentleman 16: 16
finance 12: 14 40:6 follow I 03:7 front 3 :23 64:7 34:5
73:24 following 137:12 I 04: I 9 130: 13 getting 12:6 117:3
finances 17 :6,23 follows 3:5 full 21 :24 75 :5 giarro 1: 18 141 :4, 14
18:3,6 32:9 foregoing 141 :5, 7 77:15 105:14 give 135:6
financial 17: 10 20:6 foreign 87:25 I I 1: 14 112:2 given 8:9
40:15,20,24 43:11 121 :24 114: IO 115 :2 glastonbury 4:7
43:14 46:5,7 47:10 forget 134:3 117:15 119:9 go 7:6 9:21 39:5
62: 13 I 02:20 form 7:5 42:23 45:5 120:20 43:25 54:2,3 61 :20
103:22 62:24 71:1,2 75:12 fully 136:2 64:9 69:14 75:13
financing 12:21 105: 1, 12 I 06: 20 function 37:10 86:3 87:12 89:10
14:1719:18,2321:3 112:8 113:2 123:17 funded 59: 19 90:5 93:22,24 95:8
21: 16,20,24 28:7 124: I0 I 09:23 110:5 96:10 102:22
37:24 38:4 40:25 formula 76:9, 13 funding 38:5 86:3 I 03: 13 104: 15
44:15 47:7 54:23 77: 16 78:5,9, 18 120:15 126: 19 131 : I 1,22
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56: 15 57:8, 12, 16 77:2 52:2,25 53:9, 13 136: 14,22 138:9
58:3, 13, 18,24 59:3 forwarded 93: 19 60: 10, 14 86: 1,8 goes 19:926:150:9
59:7, 14,25 60:4,21 found 27:6 121:2-. 89:20 91 :8 IO 1: 13 126:9, 12, 17 131 :24
70:20 73: 14 74:3,7 four 31:15 86:22 101:21 102:1,7 going 5:22 8:22 13:4
83:23 91 :20 92:2 105:19,24 115:7 103:21,25 104:4 13: 12 18:20 24: 19
95: 1 97: 1,5,20 131:13 110:10 I 19:6,10 28:3 3 7: 12 38:9
107:20 108: I frame 24:14 120:3,5,22 124:24 55: I 59: 13,25 61 :3
110: I 6,2 1 111: 1,7 frechette 2:5 4:4 125: 12,23 126:3, 15 61:563:18 74:7
116:18 123:7,18 5:13 7:5 11:19 12:5 126:22 75:12 89:11 90:19
124: 11 12:8,23 13 :4, 12, 15 further 122:20 103:8 110:5,9 122:9
financings 15: 16 14:7,15 16:12 18:20 138:11 141:9 12 6: 18 13 1:7,21
17: 14 102: I 6 19:2,5 25:24 32:1,5 g golf 8: 16,25 20:21
find 128: 10 43:24 44:8 49:9,20 27:7 95:3,10
g 77:3,6
finding 31 : 10 53:18 55:1 62:7,24 good 3: 13 67:8,9
garry 27: 1934:21
fine 14:9 8 I :22 63:5 64:9 67:4, 11 gotten 45:9 85: 10
57:15 58:1 63:21
finish 16: 14, 15 68:10 69:14 71 :16 grace 135:7
65:20 71 :24 104:22
firm 82:7 71 :20 72:2 75:8, 12 grade 22:6, 15 103 :3
general 1: 15 33:23
first 3:3 19: 18 21 :6 76:21,24 77: 10 80:5 great I 1:2
33:25 40:23 57:4, 18
21 :8, 11 22:24 23:9 80:11,19 81:2,9,13 greater 5: 17 113:9
110: 11
27:22 29:4, 17 33:3 81:16,2482:13 113: 11, 16,21
212-267-6868 www.veritext.com 516-608-2400
~
Case 2:16-cv-04013-SJF-,. .. , T Document 16-2 Filed 12/29/16 t-'age 48 of 60 PagelD #: 400

NELSON CORREA
[greater - indirect] Page 10
114:13 136:11 half 16:25 honest 49: 13 78:23,24 79:3,7,12

gross 21:7 59:18 hand 52:23 honestly 38: 11 79: 19,24 80:3 83:20
ground 16: 12 handled 82:7 115:6 83 :24 89 :8, I 1,23
group 4: 13, 13, 14,22 handy 59:20 hook 12:15 90:2,6 91 :4,5,9 92:5
4:23,24 5:1,11 happen 61:3 hours 34: 15 92:10 95:4,14,18,24
10: 18,20,21,25 11 :4 happened 22:19 house 2: 12 57:21 96:8 108:9, 14, 15
11:8 12:20 27:19 23:22 27:2 48:22,25 howard 28:3 33: 13 I 09:6,8, I 0, 13, 18
127: 14,23 128:6 53:19 56:15 57:1 34:4 99:24 110:13 114:9,14,21
134: 15 70:4 hundred 76: 16 115 : I, I0, I I, I9,22
groups 41 :22 happening 53 :20 77:21 78:3,7,11,12 116:2 120:20
guarantee 24:3,5, 12 happy 8: IO 30:20 122: 10, 18,20,25
25:8,23 26:8,14 harris 27:17,18,22 125: 13, 16,24
idea 23: 10 25:6
29:2,6 30:3, 13 31 :3 28: 1,22 29:8 30:8 126: 16,24
26: 11,24 72:8
47:3 94:4 31:834:2157:15 inception 54:20
identification 3 :2
guarantor 46: 15, 16 63:20 64: 1,22 65: 16 include 17:5 49:20
63:14 68:17 70:10
46:25 65:23,25 66:4,8, 12 75:2, 15 78:9 111 :7
82:19 92:14 99:6
guessing 72:2 66: I 6,21,24 67: 1,6 111: 13,23 112: 18
I 04: 14 I 06: I 0
guy 70:2 67:21 69:5,20 71: 17 114: 10 132: 11
107:8 116:11
h I 04:21,23 I 05 :2,6 included 16: 10
123:10 124:4
I 05: 18,22 106:6 74:24 78:5,18 91:20
h 3: l , 17 5 :23 11:21 128:23
131 :5,9 98:1 100:16,19
63:14,19 68:17,19 identified 9:6 18:2
hartford 2:4 3: 10 132:25
70:10,12 82:19,21 23:2 45: 11 63:22
4:1018:1041:23 includes 72:4 74: 15
92:14,16 99:6,8 64: 16 105: 16
he'll 16:15 74:23 114:4 116:5
104: 14,20 I 06: I 0 identifies 14:2,5
head 4: 13,21,24 122:4
106:12 107:8,10 ii 76:3,10
26:7 52:4,5 54: 11 including 21 :8
116:11,13 123:10 iii 88:6
I 10:1 133:5 33:13 62:15 77:6
123:12 124:4,6 immediately 118:23
hear 13:7 110:12 113:25
128:23,25 139:8,9 119:9 "
heard 29:4 125:4 inclusive 10:6
139: 10, 11, 12, 13, 15 important 10:9 65:6
139: 17,20,22,23,24 hearing 3:1798:14 impression 44 :I incorrect 131:14,17
held 1: 15, 15 3: 17 : incumbency 87:6,9
140:2,4,7,9 90 18
haber 19:24 20: 1,8 7:23 41:10,15 51:18 improve 20 :25 95 :9 87:11 121:16
20:11,13,16 21 :2,11 64:12 121:9 : index 140:1
126 4
help 134:17 indicate 121 :2
21 :23 22:2, 16,24 improvement
helpful 5:16 10:19 indicated I 0: 17
23:10,23 24:23 25:5 I 08:22,25 110:9
hereof 79:4 21: 16 24:22 53 :7
26:11,21 27:10,13 improvements
high 15:23 52: 12 56:7 64: 15 141 :6
34:4 35:10,15 36:2 20:23 29:22 34: I
36:8 55 :25 56:2,6 118:25 indicates 76: 10
37:6, 9, 14,23 38:4
higher 133:24,25 88:10
56:21 58:20,22 38: 10, 16,20 39: 12
134:6 indicating 87: 17,21
120: 11,21 121 :2 39:24 47:6 53:14
highlights 16:23 118: 18 121: 17
134: 19,23 135:9, 12 56: 18 58: 15 60: 3, 17
hired 94:21 134: 13 indicted 136:7
135: 14 136: 1, 10,2 0 60:20 61: 1 73:5, I 0
hold 16: 17 126:8 indictment 137: 11
137:4 138:4 73: 15,22,25 74:3,8
holds 8: 14 indirect 36: 11
76: 14 77:22 78:3, 13

212-267-6868 www.veritext.com 516-608-2400
,-..,.._ Document 80 Filed 08/28/17 Page 142 of 255 PageID #: 1783
Case 2:16-cv-04013-SJF-f ... r Document 16-2 Filed 12/29/16 rage 49 of 60 PagelD #: 401
NELSON CORREA
[information - larger] Page 11
information 6: 14, 15 120:4 132:12,13 29:25 31 :6 68:4 25: 12 27:4,4 32:6,6

6:25 10: 13 11 :24 133:3,4 134:2,5,7 97:6 I 03: 18 I 04:7 32:21 35:23 39: 11
43:11,14 62:13 67:5 135:9,13 135:23 40:22 45: IO 50:2,3
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Case 2:16-cv-04013-SJF-1.. ~ r Document 16-2 Filed 12/29/16 i--age 50 of 60 PagelD #: 402
NELSON CORREA
[late - mean) Page 12
late 25:3 135:3,24 68: 19 69:2,5,6, I 0 84:6,7,8, 14, 18,24 lord 2:3 4:5
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212-267-6868 www.veritext.com 516-608-2400
Case 2:16-cv-04013-SJF-;.,, T Document 16-2 Filed 12/29/16 t-'age 51 of 60 PagelD #: 403

NELSON CORREA
[mean - number) Page 13
122:16 125:4 mitigate 134:9 nassau 1: 1 new I: 1, 17, 17, I 9

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misstates 14:8 138:2 79: 15 86: 1 1 109:2,2
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109:3
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Case 2:16-cr-00540-JMA-SIL..-..,. Document 80 Filed 08/28/17 Page 145 of 255 PageID #: 1786
Case 2:16-cv-04013-SJF-J-. .. r Document 16-2 Filed 12/29/16 i-age 52 of 60 PagelD #: 404
NELSON CORREA
[numbers - paragraph] Page 14
numbers 7:7,8 obligor 11:10 12:18 operation 40:24 oyster l :7 2:7 3:15
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2 I 2-267-6868 www.veritext.com 516-608-2400
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Case 2:16-cv-04013-SJF-1-.., r Document 16-2 Filed 12/29/16 i--age 53 of 60 PagelD #: 405
NELSON CORREA
(paragraph - precedes] Page 15
105:14 131:3 132:9 percent 50:3 76: 14 10:5,6,6,14 13:2,2 place 30:24 53: 12
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128:4 9:6, 10, 12,22 10:3,5 139:6
212-267-6868 www.veritext.com 516-608-2400
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Case 2:16-cv-04013-SJF-~ .. c Document 16-2 Filed 12/29/16 t--age 54 of 60 PagelD #: 406
NELSON CORREA
[predated - rate] Page 16
predated 109: I privately 41 : 10 21 :23 23: 1 I 24:3,5 purports 80: 19

predates 78:14 probably 19:20 24:12 26:3,14 29:6 123:21
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prefer 120: 15 130:9 102:16,20 106:11 92:25 93:15 101 :14
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premium 50: 11 procedures 40:5,9 7:7 32: 18 42: 13 91:992:5 101:21
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presence 82: I 88:9,10 89:1,6,14 117:11 121:17 pushed 85 :3, 10
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present 2:12 3:9 90:21 91:3,13,17,21 provides 73: 14 put 26: 19 53: 12
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81: 1 82:5,8 95:9, 13, 18,23 96:7 providing 7:4 19: 17 q
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Case 2:16-cr-00540-JMA-SIL ,11, Document 80 Filed 08/28/17 Page...._ 148 of 255 PageID #: 1789
Case 2:16-cv-04013-SJF-J..... 1 Document 16-2 Filed 12/29/16 t-dge 55 of 60 PagelD #: 407

NELSON CORREA
[rated - reporting) Page 17
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Case 2:16-cv-04013-SJF-A,, r Document 16-2 Filed 12/29/16 l->age 56 of 60 PagelD #: 408
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[represent - security] Page 18
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Case 2:16-cv-04013-SJF-, .. , T Document 16-2 Filed 12/29/16 JJage 57 of 60 PagelD #: 409

NELSON CORREA
[see - state] Page 19
see 26:16 39:23 shocked 13 7: I 0 124: 10 sounded 1 10:20

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NELSON CORREA
[stated - time] Page 20
stated 68:4101:14 subsequent 36: 18 70:5 84:18 102:12 75: 14, 16,22 76:4, I 0
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Case 2:16-cv-04013-SJF-A,, , Document 16-2 Filed 12/29/16 1-'age 59 of 60 PagelD #: 411
NELSON CORREA
[time - understand) Page 21
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Case 2:16-cv-04013-SJF-f-\ .., T Document 16-2 Filed 12/29/16 Page 52 of 60 PagelD #: 404
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[numbers - paragraph] Page 14
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[represent - security] Page 18
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[see - state) Page 19
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I~
Case 2:16-cv-04013-SJF-A" r Document 16-2 Filed 12/29/16 Page 58 of 60 PagelD #: 410

NELSON CORREA
[stated - time] Page 20
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SUPRElvIECOURT : STATEOFNEWYORK
t,'J APPELLATE DNISION : SECOND JUDICIAL DEPARTh1ENT
--------------------X
IN THE MATTER OF AN APPLICATION FORAN ORDER
AUTHORIZING THE INTERCEPTION AND RECORD:WG OF AFFIDAVIT IN
CERTAIN TELEPHONIC AND ELECTRONIC SUPPORT OF
COMlv.fUNICATIONS OCCUR.RrnG OVER THE CELLULAR AN
TELEPHONE AND INSTRUMENT CURENTLY ASSIGNED EAVESDROPPING
TELEPHONE NUMBER (516) 250-2249, LISTED TO FREDERICK WARRANT
IPPOLITO, 45 PELICAN CT, SYOSSET, NY;
P.C.
and
IN THE MATIER OF AN APPLICATION FOR AN ORDER

AUTHORIZING THE INTERCEPTION AND RECORDING OF
CERTAIN TELEPHONIC AND ELECTRONIC
COlv.fMUNICATIONS OCCUR.RING OVER THE CELLULAR
TELEPHONE AND INSTRUMENT CURENTL Y ASSIGNED
TELEPHONE NUMBER (516) 250-6525, LISTED TO
CARLO LIZZA & SONS PAVINO INC, 50 ANGLE LANE,
HICKSVILLE, NY;
(/ and
IN THE MATIER OF AN APPLICATION FOR AN ORDER

AUTHORIZING THE INTERCEPTION AND RECORDING OF
CERTAIN TELEPHONIC AND ELECTRONIC
C01v1MUNICATIONS OCCURRING OVER THE CELLULAR
TELEPHONE AND ThTSTR.UMENT CURENTLY ASSIGNED
TELEPHONE NUMBER (516) 375-6030, LIS1ED TO
JOHN VENDITTO, 115 N. KINGS AVENUE, NORTH
MASSAPEQUA, NY.
--------- --------- -X
STATE OF NEW YORK)
: ss.:
COUNTY OF NASSAU)
GAVIN P. SHEA, Shield Number 436, being duly sworn, deposes and says:
1. I am a Detective Investigator at the Nassau County District
Attorney's Office (hereinafter "NCDA"). I have been a Detective Investigator at NCDA

(
for approximately six (6) months. Prior to joining the NCDA, I was employed as a
C)
Special Agent of the Federal Bureau of Investigation (hereinafter "FBI") for twenty
years. During my tenure, I was a Supervisory Special Agent over the General White
Collar Crime Squad and the Securities Fraud Squad. Each of these squads had more than
ten (10) assigned Special Agents as well as approximately five (5) administrative staff
members. In my role as a Special Agent with the FBI, I conducted background
investigations of Federal Judges and both Assistant United States Attorney and FBI
Special Agent Applicants. I was a member of a surveillance team that monitored and
tracked the movements of terrorist and criminal targets. I have investigated bank
robberies, kidnappings, extortions, and interstate transportation of stolen property. I have
also investigated and supervised investigations regarding complex :financial and
economic crimes including wire fraud, mail fraud, money laundering, tax evasion,
- )
securities fraud, corporate fraud, insider trading and public corruption cases. I have both
participated in and supervised public corruption investigations which have utilized court
authorized wiretaps as well as hundreds ~f hours of physical surveillance. As part of
these investigations I have also handled confidential infonnants and cooperating
witnesses. The public coITUption cases that I have participated in or supervised have
resulted in the arrests of approximately twenty (20) subjects. My involvement with

;
cooperating witnesses has led to my vast experience in making and handling consensual
telephone and body recordings. I conceived of and created two large scale sting
operations. The first involved the interstate transportation of stolen property valued at
over a million dollars. The second sting operation was related to a multi-billion dollar
treasury fraud. I am also a Certified Public Accountant, currently licensed in New York
2
State. I have fifteen (15) years of experience in analyzing financial records for the flow
of funds as well as identifying assets that can be seized or made subject to forfeiture. I
have conducted hundreds of hours of physical surveillance on many investigations
including ones related to public corruption.
2. During my career with the FBI, I received legal training with
respect to, court authorized wiretaps and pen registers which included training regarding
proper minimization and the handling of privileged communications. I have monitored
pen registers in a securities fraud case. I have also monitoreq wiretaps in several
investigations, including a public corruption investigation.
3. All of my training and experience has familiarized me with the
language, conduct, and customs of individuals engaged in various corruption and
criminal schemes. I have developed ~xtensive knowledge of the methods and practices of
criminal operations and conspiracies, including the terminology used by individuals
involved in such operations and conspiracies. I have become familiar with the methods
of individuals who participate in large, complex criminal conspiracies, the way in which
they conduct business, operate their schemes and enterprises, and the manner in which
they engage in conspiracies in order to evade detection by law enforcement.
4. An on-going investigation being conducted by the NCDA has
revealed probable cause to believe that Frederick Ippolito ("IPPOLITO"), John Venditto
("VENDITTO"), their agents, co-conspirators and others as yet unknown are engaged in,
and continue to engage in designated crimes, namely Bribe Receiving in the Tirird
Degree, in violation of Penal Law 200.10, and Corrupt Use of Position or Authority, ln
violation of Penal Law 200.56, and Conspiracy to commit those aforementioned
3
offenses in violation of Article 105 of the Penal Law. Our investigation has likewise
established probable cause to believe that the above-captioned cellular telephones and
instruments have been and will continue to be used to discuss and engage in those crimes.
Consequently, I submit this affidavit in support of the Application of Madeline Singas,
District Attorney of Nassau County, for an Eavesdropping Warrant authorizing the
interception and recording of certain telephonic and electronic communications (including
text messages) occurring over the cellular telephones and instruments cU1Tently assigned
Mobile Telephone Numbers (516) 250-2249, listed to Frederick Ippolito, 45 Pelican Ct,
Syosset, NY (hereinafter "IPPOLITO PHONE # P'), (516) 250-6525 (hereinafter
"IPPOLITO PHONE # 2''), listed to Carlo Lizza & Sons Paving Inc, 50 Angle Lane,
Hicksville, NY, and (516) 375-6030 (hereinafter "VENDITTO PHONE# 1"), listed to John
Venditto, 115 N. Kings Avenue, North Massapequa, NY, as those communications relate to
the commission of the crimes ofBrib~ Receiving in the Third Degree, in violation of Penal
Law 200.10, and Corrupt Use of Position or Autho~ty, in violation of Penal Law
200.56, and Conspiracy to commit those offenses in violation of Article 105 of the Penal
Law.
5. Unless otherwise indicated, the facts set forth in this affidavit are
based upon my own observations and lmowledge, information supplied by confidential
informants, materials published in the media, my examination of the investigative reports
and records prepared and/or maintained by the NCDA, my conversations with members of
NCDA, infonnation obtained by the use of a Pen Register and Trap and Trace Device, as
well as my review of phone records and my review of other materials specifically noted
herein.
4
6. All dates and times referred to herein are approximate. Furthermore,
unless otherwise noted, where statements of other individuals are described, those
descriptions are intended to convey the sum and substance of such statements, and are not
necessarily exact quotes. This affidavit is submitted for the sole purpose of supporting an
application to conduct electronic surveillance. Consequently, not every detail or aspect of
our ongoing investigation has been noted herein.
BACKGROUND OF THE INVESTIGATION
7. The Town of Oyster Bay (hereinafter "TOB") is one of three town
governments in Nassau County, New York. There are nine elected officials in the TOB
government: the Supervisor (who is the head of the TOB government), six town council
members, the Town Clerk, and the Receiver of Taxes. All nine of these current elected
officials in TOB are members of the Republican Party. VENDITTO is the Supervisor of
TOB and has held that office since 1998. As Supervisor, VENDITTO casts votes on
Town Board resolutions alongside the council members. He is also the Leader of the
North Massapequa Republican Club, which has its headquarters at 692 Broadway, North
Massapequa, New York.
8. IPPOLITO, a 77 year old male, was employed in various titles
within the TOB government from 1956 to 1987 and then return~d to TOB in 2009 as the
Commissioner of Planning and Development. As Commissioner of Planning and
Development, IPPOLITO w~ responsible for the enforcement of all codes, rules and
ordinances pertaining to building and zoning in unincorporated areas of TOB as well as
the issuance of permits for construction. IPPOLITO was or is a principal in several
businesses including a restaurant, Christiano's, and a snow removal company, National
5
Snow Removal. He was employed in some unknown capacity by Carlo Lizza and Sons,
Paving Inc., which according to a Newsday article dated April 18, 2015, has received
about $100 million in publicly bid road work in Nassau County since 2002, including a
2013 contract with TOB for $5.7 million. Newsday also reported that the Lizza family
has ,:given the Nassau GOP committee more than $550,000 since 2002, with other family
members and their companies raising the total to $612,575." The article further stated
that the Lizzas have donated over $300,000 to Democratic candidates in Nassau County
during a similar time period.
9: I am informed by members of the NCDA that the Public
Corruption Bureau has received and investigated numerous complaints against
IPPOLITO by TOB residents, alleging that he uses his authority to reward those he
favors and to punish those he does not favor. He has also been the subject of multiple
civil lawsuits by residents and businesses in TOB. One of the civil cases against
IPPOLITO, Morizio et al v. The Town of Oyster Bay et al, was filed in the U.S. District
Court for the Eastern District of New York on February 26, 2014. The plaintiff alleged
that IPPOLITO abused his authority and violated the plaintiff's civil rights by
capriciously shutting down the plaintiff's restaurant, Cafe Al Dente. The case recently
went to trial and a jury verdict was reached on June 22, 2016. Newsday reported that the
jury found TOB and IPPOLITO jointly liable for $650,000 in compensatory damages and
IPPOLITO was found personally liable for another $650,000 in punitive damages. The
award was reduced to $450,000 by the presiding judge on July 7, 2016, but the
defendants remained liable.
I 0. The TOB government has been plagued by corruption scandals in
6
the last year. In 2015, the U.S. Attorney's Office for the Eastern District of New York
indicted a politically-connected restauranteur, Harendra Singh, who had exclusive
arrangements to run a catering facility at a mansion on a TOB golf course and
concessions at TOB beaches. He was charged with numerous frauds and tax crimes as
well as with bribing a TOB official. The U.S. Attorney's press release explained:
The indictment charges that Singh paid bribes and kickbacks to a Town
employee (identified in the indictment as co-conspirator #3) in exchange
for the co-conspirator's assistance in obtaining the Town's guarantee of
two loans totaling approximately $20 million that two of Singh's
businesses received from a private corporate financing company
(identified in the indictment as the Lender). As a result, were Singh's
entities to default on the loans, the Town would be responsible for
repaying the Lender the entire amount of the loan.
IPPOLITO was known to have a close relationship with Singh and sold him his restaurant
Christiano's in 2013, after IPPOLITO ran into tax problems with State authorities.
IPPOLITO was found to be personally liable for failing to collect sales and use taxes at
the restaurant from 2003 to 2006. He appealed the matter to the 3rd Department in 2014,
but the finding of personal liability was affirmed in Ippolito v. New York State Dept. of
Taxation and Finance, 116 A.D.3d 1176 (3 rd Dept 2014). He was represented on appeal by
Frank Scalera and Matthew Rozea, two attorneys in the TOB Town Attorney's Office.
On July 6, 2015, a New York State Tax Warrant was filed against IPPOLITO for
$146,130.88 for the truces owed by Christiano's. As of July 11, 2016, the warrant
remains active.
11. On March 20, 2015, IPPOLITO was indicted by the U.S.
Attorney's Office for the Eastern District of New York f9r six counts of Tax Evasion.
The U.S. Attorney's press release stated:
) According to the indictment, from 2008 to 2013, Ippolito received
7
over $2 million in consulting fees from Carlo Lizza & Sons,

) Paving, Inc., a company located in Old Bethpage, New York, as
well as from a principal of that company. Ippolito allegedly evaded
truces on that income by willfully failing to report it on his personal
tax returns or the tax returns of entities he controlled. Ippolito is
the President of CAI Associates, LTD, a consulting and snow
removal business, and a former officer of CAI Restaurant, Inc.,
d/b/a Christiano's, in Syosset, New York.
12. Following his indictment, IPPOLITO took a leave of absence from
his post on March 30, 2015, but returned to work on May 18, 2015, continuing to perform
his duties without restriction while felony charges were pending against him. On January
26, 2016, IPPOLITO pied guilty to one count of Tax Evasion in violation of Title 26,
U.S.C. 7201. At the time of his plea, it was believed that the sentencing guideline was
18 to 24 months prison, but the U.S. Attorney's Office for the Eastern District of New
") York filed a sentencing memo on July 11, 2016 arguing that the sentencing guideline
should be 24 to 30 months, after talcing into account the amount of money IPPOLITO
owes to State tax authorities. IPPOLITO's sentencing date in Federal Court was
scheduled for July 13, 2016. However, Newsday reported that at the time he appeared for
sentence, Judge Wexler was troubled by unanswered questions regarding the nature of
the income received by IPPOLITO from the Lizza family and wanted answers regarding
IPPOLITO's influence over "the town's granting of paving contracts with the company
and what connection or control Ippolito had over the contractor." Newsday quoted
Wexler as stating, "I have never in my 33 years, as long as I've been a judge, gone
beyond the maximum .. But there is something rotten in the Town of Oyster Bay
and this court wants to know what's going on .. and I'm sure the people of Oyster
Bay want answers too." Wexler stated that he is contemplating an upward departure
8
( ,,
from the sentencing guidelines and submitted a series of questions to IPPOLITO that he
wants answered regarding the Lizza payments before he sentences him.
13. The day after his plea, it appeared that TOB was allowing
IPPOLITO to continue in his role as Commissioner of Planning and Development despite
his felony conviction. Newsday reported:
Town Supervisor John Venditto last year rebuffed calls to fire

Ippolito after his indictment on six counts of tax evasion. Oyster
Bay spokesman Brian Devine said that 'no decision has been made
yet' regarding Ippolito's employment with the town. 'At this point,
the town hasn't had a chance to review all of the parameters of the
plea agreement,' Devine said
14. In response to this development, Nassau County District Attorney
Madeline Singas, wrote a letter to VENDITTO dated January 28, 2016, stating:
As you know, Frederick Ippolito, your appointed Commissioner of

the Department of Planning and Development for the Town of
I
Oyster Bay, was convicted of federal felony ta."< evasion charges on
January 26, 2016. Upon conviction of a felony, a public officer's
position immediately becomes vacant as a matter of law. Today,
Newsday reported that Mr. Ippolito continues to hold his appointed
position as a public office [sic] in the Town of Oyster Bay. If true,
this violates New York State law, and any public officer who
refuses to perfonn the responsibilities necessary to effectuate the
removal of Mr. Ippolito may be committing the crime of Official
Misconduct. Please promptly confirm to this office that Mr.
Ippolito's position is now vacant as required under New York State
Public Officers Law.
15. Later that day, Tom Sabellico, Special Counsel to the Town of
Oyster Bay, informed the NCDA, via letter, that the Office of the Commissioner of
Planning and Development had been vacated as of January 26, 2016.
16. Despite TOB's assurance that IPPOLITO was no longer working
for TOB, NCDA received information from multiple sources, some of it anonymously
9.
( ,.
conveyed, that IPPOLITO was still working as the Commissioner of Planning and
Development.
17. Suspicions about IPPOLITO's continued involvement with TOB
were also raised by subsequent reporting by Newsday. On February 17, 2016, Newsday
reporter Ted Phillips shared a photograph on Twitter of a large sign in front of TOB's
Planning and Development office, bearing IPPOLITO's name as Commissioner.
Newsday reported on February 22, 2016, that the sign was taken down. On April 19,
2016, Newsday reported that VENDITTO stated publicly that he has no plans to replace
IPPOLITO because the two deputy commissioners, Timothy Zike and Diana Aquiar, are
running the department very well.
18. On June 3, 2016, the NCDA sent a letter to Tom Sabellico, Special
Counsel to the Town of Oyster Bay, requesting IPPOLITO's "resignation or termination
letter and any other documents concerning his separation from Town employment." On
June 6, 2016, Mr. Sabellico responded by letter, enclosing two forms:
1) Report of Personnel Action (CS-39) certified on February 4, 2016 and filed

with the Civil Service Commission of the County of Nassau verifying
termination of'employment of Frederick Ippolito, effective January 26, 2016;
and 2) Town of Oyster Bay Department of Human Resources employee work
record for Frederick Ippolito, indicating termination as of the close of business
(COB), January 26, 2016.
19. The TOB is currently the only municipality in New York State to
have a "junk" credit rating. Newsday reported on April 27, 2016, that "Standard &
Poor's downgraded Oyster Bay Town's credit rating to junk status ... citing a decade of
deficits and weak financial management." It was further reported:
Five years ago, Oyster Bay had the highest possible rating from
Standard & Poor's and a good one from Moody's Investors
10
Service. But those slid and Moody's withdrew its rating altogether
in January after the town failed to produce its 2014 audited
financial statement. The town did file one earlier this month, but it
showed bigger operating deficits in 2014 than had been estimated,
including $19 million in the general fund and $9.2 million across
other major government funds. Standard & Poor's noted that the
town's debt burden has increased "significantly" during the past 10
years. Town documents show that it ended 2006 with $333.6
million in long and.short tenn capital debt, including $24.7 million
in water district debt. The rating agency calculates the town's
current debt at $792 million. Nassau County Comptroller George
Maragos said the town ne~ds outside, professional help to address
its fiscal problems. "Their financials look terrible with very few
options to fix them," Maragos said. "They've spent excessively,
they need to clamp down."
CURRENT INVESTIGATION
20. An on-going investigation, being conducted by the NCDA has
revealed probable cause to believe that Frederick Ippolito ("IPPOLITO"), John Venditto
(''VENDITTO"), their agents, co-conspirators and others as yet unknown are engaged in,
and continue to engage in designated crimes, namely Bribe Receiving in the Third
Degree, in violation of Penal Law 200.10, and Corrupt Use of Position or Authority, in
violation of Penal Law 200.56, and Conspiracy to. commit those aforementioned
offenses in violation of Article 105 of the Penal Law. Specifically, the. investigation has
-revealed that IPPOLITO is holcling himself out as and is exercising the functions of the
Commissioner of Planning and Development. Furthermore, the investigation has also
established he is using his position and authority for the corrupt purposes of providing a
TOB job to an individual in exchange for the promise of sex and marriage from the
individual's mother. There is also evidence that he is in the process of obtaining TOB
employment for the son of an employee who works for him at TOB as weJ.1 as for his
private business, National Snow Removal. The investigation has also shmvn that
11
IPPOLITO uses VENDITTO as his conduit to effect official actions within the TOB
government, such as securing employment for others, personnel transfers, and budgeting.
Since IPPOLITO cannot appear at his office at Town Hall due to publicity surrounding
his conviction, I believe he communicates his directives to VENDITTO by telephone and
in-person meetings at private locations. It appears VENDITTO, in tum, communicates
with other TOB Commissioners and employees to carry out these orders. Additionally,
. this investigation has revealed that IPPOLITO appears to have an agreement with
members of the Lizza family, which awards IPPOLITO a "commission" after certain
actions are approved by the TOB Town Board.
21. As described above, TOB is in a dire :financial crisis and it is
amidst this backdrop that IPPOLITO has secured employment for one individual and is in
the process of obtaining employment for another.
22. As detailed more specifically below, our investigation thus far has
included the following: the use of confidential informants; recordings of both in person
conversations and telephonic/electronic communications; the use of a Court-authorized
Pen Register and Trap and Trace Device pertaining to telephonic communications, text
messages, and cell site data; and the extensive analysis of cellular telephone subscriber
and call detail information. It should be noted that for the purposes of this Affidavit, the
word "call(s)" refers to telephone contact between two (2) phones and therefore may
include text messages.
23. Based upon facts developed during the course of the instant
investigation, on July 1, 2016, the Honorable Jeffrey A. Cohen, Associate Justice of the
Appellate Division, Supreme Court of the State of New York, Second Judicial
12
Department, issued an Order for Pen Registers and Trap and Trace Devices, effective
i
July 1, 2016, authorizing the installation and use of Pen Registers and Trap and Trace
Devices (Caller I.D.), release of OPS/GEO location and Latitude and Cellular Site
Location Information, and the release of historical Cellular Site Location on the cellular
telephones and instruments assigned Mobile Telephone Numbers (516) 250-2249
("IPPOLITO PHONE# I"), (516}250-6525 ("IPPOLITO PHONE# 2"), and (516) 375-
6030 (''VENDITTO PHONE# l") related to the commission of crimes involving Penal
Law 200.10 (Bribe Receiving in the Third Degree) and 200.56 (Corrupt Use of
Position or Authority) and Conspiracy to commit those aforementioned offenses in
violation of Article 105 of the Penal Law.
24. For the purposes of the instant Application, I incorporate herein, by
reference, the July 1, 2016, Order for a Pen Register and Trap and Trace Device, and the
affidavit submitted in support thereof, as if they were fully set forth at length herein.
25. On April 5, 2016, a 46 year old female (hereinafter CI #1),
previously unknown to the NCDA, came to the NCDA's office to file a complaint against
IPPOLITO. NCDA Detective Investigators Joshua Genn (hereinafter "DI Genn") and
Edward Maley (hereinafter '~DI Maley") interviewed CI # 1.
26. I am infoimed by DI Maley and DI Genn that CI #1 met IPPOLITO
in 1996, when she began working at his restaurant, Christiano's. Later on she became the
caretaker for IPPOLITO's terminally ill (now deceased) mfe. CI #1 eventually began a
romantic relationship with IPPOLITO and moved into his home at 45 Pelican Ct, Syosset,
while continuing to care for his wife. CI #1 's sick father also moved into this residence. CI
# 1 has two sons from prior relationships and IPPOLITO secured employment for both of
13
them with TOB. IPPOLITO and CI #1 became engaged to be married, but CI #1 later broke
off the engagement. CI #1 came to the NCDA to allege that after she broke up with
IPPOLITO, he had her younger son (hereinafter SON # 2) fired from TOB, which upset CI
# I because SON #2 has a developmental disability and could not find employment
elsewhere without difficulty. CI #1 said that IPPOLITO was unable to fire her older son
(hereinafter SON #1) because he was working for the TOB long enough to have civil
service protection.
27. I am informed by DI Maley and DI Genn that CI #1 provided the
NCDA with a letter dated December 3, 2015, from the Code Compliance Division of the
TOB Department of Planning and Development. I have obtained and reviewed this letter. I
am informed by CI #1 that the letter is dated after CI #1 broke off her engagement to
IPPOLITO and moved into a house owned by her father. The letter is addressed to CI #1 's
father since CI # 1 resides at this residence with her father. It states that a ,:Request for
Investigation" form has been filed with respect to CI #1 's father's house, where CI# 1 also
was residing, alleging that the house was illegally set up as a two-family residence and the
house was subject to TOB inspection and potential boarding up of the home. Moreover, the
letter states that the homeowner may be subject to possible civil and criminal penalties.
Some of the violations specified in the letter were conditions that CI #1 stated that
IPPOLITO was aware of during their relationship, but ignored. The letter states, among
other things, "you are directed to (1) return the dwelling to a one-family home, and (2)
vacate the camper in the driveway." CI# 1 informed me that her ex-boyfriend, Karl, lives in
the camper on her property, which angers IPPOLITO. The letterhead has IPPOLITO's
name printed at the top and the letter is signed by the Bureau Chief of the Code Compliance
14
,. Division, Michael Esposito, on behalf of IPPOLITO.

l
28. I am infonned by CI # 1 that there were restaurants at which
IPPOLITO would not be charged for meals, because he had granted permits for those
establishments. CI #1 stated that they frequently went to dinner together, usually to the
same group of restaurants within the Town of Oyster Bay - Angelina's, Franina, and The
Fox Hollow fun - and he never paid for dinner, but would leave a tip. She recounted an
incident in which IPPOLITO was upset with a waiter's performance at Angelina's restaurant
and used his authority to shut down the restaurant for a week in retaliation.
29. CI # 1 infonned me that IPPOLITO had a. close relationship with
Keith and Aly Lizza of Carlo Lizza & Sons Paving and would refer to Aly Lizza as his
"brother." She stated that IPPOLITO would receive a $25,000 check each month from the
Lizzas. 1
30. CI # 1 informed me that IPPOLITO communicated with her using
the telephone number 516-250-2249 (IPPOLITO PHONE# 1) and showed numerous text
messages to and from IPPOLITO PHONE # 1 to myself that she had stored in her phone.
CI # 1 stated that IPPOLITO also used a second phone mun.her to communicate with her,
516-250~6525 (IPPOLITO PHONE# 2), which was paid for by the Lizzas.
31. I have obtained and reviewed subpoenaed records from Verizon
Wireless which confirmed CI # l's information about the phone numbers. The subpoeaned
subscriber infonnation revealed that IPPOLITO PHONE # 1 is registered to Frederick
Ippolito, 45 Pelican Ct., Syosset, NY and IPPOLITO PHONE# 2 is registered to Carlo
1 I have obtained and reviewed the Indictment of the United States of America against Frederick
Ippolito, Indictment 2015R00415, which alleges that he received $2,053,500.00 in payments from
a principal of Lizza & Sons from 2008 to 2013.
15
Lizz.a and Sons, 50 Angle Lane, Hicksville, NY.
32. I have also interviewed another confidential informant, (hereinafter
CI # 2), regarding various matters of corruption in TOB. CI # 2 worked for TOB for almost
20 years and was the Acting Superintendent of Communications until March 2016. In that
role, he was in charge of all telephone systems for TOB. CI # 2 also informed me that
IPPOLITO had a phone registered to Carlo Lizza and Sons. CI # 2 said that he was once
summoned to IPPOLITO's office to fix a cell phone. CI# 2 called the phone carrier about
IPPOLITO' s cell phone and learned that the SilYI card in the phone was not registered to
TOB, but to Carlo Lizz.a and Sons. CI # 2 also stated that IPP.OLITO appeared to him to be
the most powerful person in TOB government and CI# 2 believed that IPPOLITO was
above VENDITTO in the TOB government hierarchy.
33. I have found Cl # 2 to be a source of reliable infonnation. During
an interview session with CI # 2 on April 11, 2016, CI # 2 informed me that. a few years
ago, he was summoned to a TOB o:ffice2 and an employee in that office asked CI# 2
about the retention of voicemails, specifically whether a voicemail could be retrieved
from the voicemail system after manual deletion. The employee told CI # 2 that a
voicemail had been received at the Town Attorney's Office that she wanted to be
permanently erased. CI # 2 informed me that he listened to the voicemail, which was
from an irate restaUiclt o\:vner making allegations against IPPOLITO. CI# 2 made a
copy of the voicemail prior to erasing it. CI # 2 provided the NCDA with a copy of the
voicemail during a follow-up interview session on April 20, 2016. I have listened to the
voicemail message and confinned that the caller made allegations of corruption against
2 Cl# 2
believed that it may have been the TOB Town Attorney's Office, but was not sure and
that he believed that the employee he spoke with was named Erin 1 but he was not certain.
16
IPPOLITO in a furious tone of voice. The following is an accurate transcription of the
voicemail, which began with a voicemail greeting that stated, "First saved voice message.
Message received February 3, 2012 at 12:10 PM," and then continued in a male voice:
Yes, Katherine. This is Mr. Degel from Jack's Shack in Glen Head and
Uncle Jack's.Steakhouse. I called you previously a couple of months ago
in regards to the issues we've been having Mr. Fred Ippolito from the
village of, Town of Oyster Bay in the building department per Jack's
Shack in Glen Head. So basically, it's only gotten worse. He came and
reinspected, violations cause I had too many seats, closed us down, then
we removed the seats, then they open us up, he's holding us hostage every
goddamn day here. You name it, I had an antique tub with beverages
moved out. It's in the way of the aisle, it's blocking stuff. The aisle is 8
feet wide, 10 feet wide. So now I have a 1500 square foot restaurant, fast
casual, all-natural eatery in Glen Head in a brand new strip mall with 35
parking spots behind us with a municipal lot across the street that has 50
parking spots with schools down the block and neighbors that walk there,
but I'm only allowed to have 16 seats in this 1500 square feet fast casual
eatery built of recycled materials that the neighbors love. I have 3000
signatures that want seating here, but yet this Fred Ippolito, who doesn't
lmow a goddamn thing about building a goddamn business is holding me
hostage here and affecting my business and close me down for ten days
and still hasn't approved me to back open here! This is goddamn
ridiculous! I'm going to every newspaper, I'm going to every news
channel and I'm going to tell everybody how corrupt the Town of Oyster
Bay is with this man and what he does to shake people down and control
business! I employ twenty five people from the immediate area, all of
them have been out of work. I even put $350,000 of my money into this
location ~to have sixteen seats?! When I first started this plan, I went to the
Town of Oyster Bay, I dealt with Brian with my architect Sergio and they
told us we were going to have thirty seats no problem! A year later Fred
Ippolito wanted me to be a take out! He held my plans and permits up for
one year! I started this project two and a half years ago in my life and I got
to deal with this guy and everyone tells me he is untouchable! Everybody
tells me you gotta give him envelopes and he's been shaking people down
for years. I got a hundred stories. I WANT TO SPEAK. TO JOHN
VENDITTO! YOU TOLD lvfE YOU WERE CALLING NIB BACK! I
DIDN'T GET A CALL FROM YOU AT ALL! YOU TOLD 1v1E YOU
WERE ON IT! THAT WAS RIGHT BEFORE THE ELECTION! THE
ELECTION HAPPENS WHAT YOU FORGET ABOUT IvIB?! WELL
I'M TELLThTG YOU RIGHT NOW I AM MAKING THIS MY
PERSONAL VENDETTA FOR THE NEXT SIX MONTHS OF MY
LIFE TO PUT THIS TOWN OUT OF ITS MISERY!!!
17
34. A review of the NCDA's Public Corruption Bureau's database
shows that the TOB Town Attorney's Office never referred the allegations in the above
voicemail to the NCDA for investigation. An internet search shows that William Jack
Degel owns three Uncle Jack's restaurants in Manhattan and Queens and the website for
Jack's Shack, www.jacksshack.com, states the Mr. Degel is the founder of Jack's Shack,
located in TOB.
35. After DI Genn and DI Maley informed me of their interview of CI
#1, I contacted her and she agreed to become a confidential informant for NCDA and I
became her "handler." CI # 1 gave me her cell phone so that information stored in it
could be downloaded and reviewed. CI # 1 also agreed to reestablish contact with
IPPOLITO and provide NCDA with recordings of any telephonic communications with
IPPOLITO that might ensue.
36. CI # 1 contacted IPPOLITO PHONE # 1 by text message and
began to regularly exchange text messages with IPPOLITO, leading to telephone
conversations and dinner dates. CI # 1 regularly provided me with text messages from
IPPOLITO and also made her cell phone available for downloading at the NCDA. She
has also recorded telephone conversations with IPPOLITO and provided those recordings
to the NCDA for review.
37. CI # 1 provided me with a screenshot of a text message from
IPPOLITO PHONE #1 from April 24, 2016, in which IPPOLITO stated that later in the
day he was going to have a "meeting with John and the town board at headquarters in
Massapequa" I believe, based_ on my experience as well as my investigation of this case,
that this is most likely a reference to the headquarters of the North Massapequa
18
Republican Club, located at 692 Broadway in North Massapequa, of which VENDITTO

_)
is the Executive Leader.
38. CI #.1 provided me with a screenshot that she had taken of a text
message she received from IPPOLITO PHONE # 1 on April 26, 2016 at approximately
12:49 PM. In the message, IPPOLITO refers to himself as a person that "became the
third most powerful individual in a county that is larger than many states ... ''
39. Beginning on April 26, 2016, IPPOLITO and CI # 1 went on
several_ dinner dates at restaurants located in Nassau County. As practical, prior to each
dinner, I provided CI# 1 with audio recording equipment and instructed her on how to
operate and conceal the devices. During the dates that took place in the beginning of the
investigation, I would personally observe IPPOLITO and CI # 1 enter and/or exit the
restaurant together. After each date, I debriefed CI# 1 about the sum and substance of
her conversations with IPPOLITO and retrieved the recording equipment from her and
brought it back to the NCDA for review. As of this wijting, CI #1 and IPPOLITO have
been on eight (8) dinner dates and one (1) lunch date, all except two were at restaurants in
Nassau County. Four of those nine meals were at restaurants within the TOB that CI #1
has informed me that IPPOLITO has frequented over the years, Franina and the Fox
Hollow Inn. I am informed by CI # 1 that she did not observe IPPOLITO presented with
a bill for these meals at Franina and The Fox Hollow Inn during this investigation. CI# 1
has informed me that that on multiple times over the course of these dates, IPPOLITO
has discussed with CI # 1 that he is still the Commissioner and cannot be fired by the
Town, that he frequently meets with VENDITTO for TOB business, and that he loves
and wants to marry CI # 1. I have reviewed the audio recordings of each date between
19
\
IPPOLITO and CI #1 and have heard IPPOLITO make these statements
I
40. Due to technological limitations of the recording equipment used
and the loud ambient noise of crowded restaurants, which fluctuates, much of what is
contained on the recordings is unintelligible. However, there are ti.mes where the
substance of the conversation is understandable and, thus, could be transcribed.
41. I am informed by CI # 1 that on April 26, 2016 she and IPPOLITO
had dinner at Franina, located in Syosset within the TOB. I am informed by CI #1 that
she recorded their conversation that night and I have obtained and reviewed this
recording. During their conversation, IPPOLITO discuss~d his guilty plea and that
Nassau County District Attorney Singas sent a letter to VENDITTO stating that
IPPOLITO could no longer be a public official. IPPOLITO told CI #1 that the DA's
position was wrong because his crime was as irrelevant and as minimal as "getting a
)
/
speeding ticket 20 years ago." He went on to say, "No, I'm still the Commissioner. They
can't fire me" and explained that he could only be fired by a Town Board resolution and
that would not happen because he would "probably have the best lawsuit in the world."
He added, "so we can't pay him and they can't fire me and that's why I'm working out of
the house" and that he is with VENDITTO ';at headquarters every Saturday and Sunday."
From the context of the conversation, I believe when IPPOLITO stated, ';so we can't pay
him," the "we" he referred to is TOB and the "him" is IPPOLITO.
42. I am informed by CI #1 that on May 25, 2016, she went to dinner
with IPPOLITO at the Fox Hollow Inn, located in Woodbury in the TOB. I am informed
by CI #1 that she recorded the conversation during that dinner with an electronic device
that I provided to her. I have obtained and reviewed this recording. During the dinner, a
\
20
third person engages in a conversation with IPPOLITO and CI #1 and they discuss TOB
('
\
business. CI #1 informed me that this person is Tony Scotto, the owner of the Fox
Hollow Inn. IPPOLITO explains to Scotto the plans to continue the catering operation at
the mansion at the TOB golf course in the aftermath of the Singh indictment. IPPOLITO
informs Scotto that there are problems with a new investor in Singh's company, Ravi
Chopra, because he has a pending felony DWI charge in Nassau County. IPPOLITO tells
Scotto that VENDITTO is very concerned that brides who have upcoming weddings at
the TOB golf course be assured that the weddings will still go on as planned and that
Frank Nocerino, TOB Parks Commissioner, is in charge of that responsibility.
IPPOLITO tells Scotto that the TOB may need him to take over the weddings in an
emergency if Singh's company cannot properly operate. IPPOLITO assures Scotto that
the TOB will not let Scotto take a loss under those circumstances. IPPOLITO then tells
Scotto that Harendra Singh initially approached him about seeking the illegal loan
guarantees, before he bribed another TOB official to get them signed. The following is
an accurate transcription of that portion of the recording:
I'll tell you something that a lot of people don't know. You know this
deal that H 3 pulled? When he, when he paid the town attorney's deputies?
Paid them money you know? H came into my office and asked me to do
that. I said, 'We can't do that. The town can't sign for you. We can't do
that.' He says, 'Can you talk to Mondello4 and John and see if they'll give
me a break anyway' and I said, 'Listen to me, it's illegal. We can't do
that.' He went across the street, right across the parking lot. .. and got a
hold of Freddy Mei5 and he says to Freddy, 'Listen, I'll buy you a new
BMW. Can you do that?' and what does the guy?- 'Oh sure, of course, no
problem.n But he actually came into my office and asked me to do that.
3
According to Cl # 2 and another source I have interviewed, 11 H" is the nickname of Harendra
Singh.
4 I believe
that this is a reference to Joseph "Joe" Mondello, the Chairman of the Nassau County
Republican Committee.
) 5
Freddy Mei was an attorney in the tos Town Attorney's Office. Upon information and belief, he
resigned in 2015 due to his role regarding the Singh allegations.
21
f
I
43. On May 18, 2016, NCDA Investigator Milton Branch downloaded
and preserved text messages from CI # 1's phone. I have reviewed these text messages
which were exchanged between CI# 1 and IPPOLITO, using IPPOLITO PHONE# 1,
from April 8 through May 18, 2016. On May 17, 2016, at approxnnately 1:59 p.m.,
IPPOLITO, using IPPOLITO PHONE# 1, sent a text message to CI# 1's phone that
stated:
The town of oyster bay is in seri~us rmancial difficulty and after all
day meetings yesterday mondello decided that the only person that
could save or bail out the town is FPI so I've been on the phone all
day laying out a program that will remove the junk bond
classification reduce the operating and capital programs and balance
the budget! So far so good! Other than that it's simple but everyone
calls and asks how's it going!! I've reduced the budget so far by at
least 100 million.6
, 44. In order to give this text message some context, some background
I
information is warranted. Newsday reported on April 28, 2016, that the TOB created a
'~k force" to address the TOB's credit downgrade to ''junk" status:
Town Supervisor John Venditto said Thursday the group will consist of
himself, Councilman Joseph Pinto, Town Comptroller Robert McEvoy,
Town Finance Director Robert Darienzo, as well as .its longtime
accounting firm Albrecht, Viggiano, Zureck & Company PC of
Hauppauge and its Syracuse-based fmancial adviser, Fiscal Advisors &
Marketing Inc. "These are people who have firsthand knowledge of all the
information we're going to need to address the issues we're confronted
with," Venditto said, adding that other people could be added to the group.
"As the situation unfolds and the scope of activity is clearer we'll attach to
the task force whoever else we need or whatever other resources we
need," he said.
In the above text message, I believe that Mondello is another reference to Joseph
6
I have obtained and reviewed subpoenaed call detail records from Verizon Wireless which
corroborate that IPPOLITO PHONE# 1 sent a text message to Cl# 1's phone on May 17, 2016
at approximately 1:59 p.m.
22
133. Aside from what I have detailed above, the electronic surveillance
index maintained by the Office of the District Attorney of Nassau County has been
searched and does not reflect that the above-captioned cellular telephone or targets as
participating in the crimes set forth above have been the subject of prior electronic
surveillance.
WHEREFORE, I respectfully request that the Application of Madeline
Singas, District Attorney of Nassau County be granted and an Eavesdropping Warrant be
issued in the form annexed.
GAVINP. SHEA
Detective Investigator
.., Sworn to before me this
/ ~
No Public
r-a,1Ah iAS~N DUNLEAVY

Notary Public, State of New York
No. 01 DU6192511J
Qualified In Nassau County
Commission expfres October 20, 2ol.!.
86
~;
ALL,SlATE' LEGAL 800 2220S10 ED11 RECYCLED ~
~ ,..-.. 188 of 255 PageID #: 1829
Case 2:16-cv-04013-SJ~ ,KT Document 21 Filed 05/30/17 .1ge 1 of 43 PagelD #: 591

----------------------------------------------------------------------X
PHL VARIABLE INSURANCE COMPANY,
Plaintiff,
-against- 16-CV-4013 (SJF)(AKT)
TOWN OF OYSTER BAY, OPINION and ORDER
Defendant.
----------------------------------------------------------------------X
FEUERSTEIN, District Judge:
On or about July 19, 2016, plaintiff PHL Variable Insurance Company ("plaintiff' or
"PHL"), commenced this action against defendant Town of Oyster Bay ("defendant" or "the
Town") pursuant to this Court's diversity of citizenship jurisdiction under 28 U.S.C. 1332,
asserting claims seeking damages for breach of contract, unjust enrichment, innocent
misrepresentation, negligent misrepresentation and fraud. On July 27, 2016, plaintiff filed an
amended complaint, inter alia, asserting additional claims against defendant seeking damages for
innocent misrepresentation, negligent misrepresentation and fraud. Pending before the Court is
defendant's motion to dismiss plaintiff's claims against it in the amended complaint pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim for relief. For
the reasons set forth below, defendant's motion is granted to the extent set forth herein.
I. BACKGROUND
A. Factual Background 1
1
The factual allegations in the amended complaint are assumed to be true for purposes of this
motion, "unless contradicted by more specific allegations or documentary evidence," L-7
~ 189 of 255 PageID #: 1830
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Defendant is a town located within the County of Nassau, in the State of New York, that
owns and operates, inter alia, a municipal golf course (the "Golf Course"). (Amended
Complaint ["Am. Compl."], ,r,r 5, 8). There are several dining and concession facilities at the
Golf Course ("the Facilities"), including: ( 1) a restaurant, catering and banquet facility
commonly known as "The Woodlands at Woodbury;" (2) a snack bar called "The Halfway
House," located on the eighth (8 th ) tee; and (3) other concessions "sited at the driving range."
(Id., ,r 9).
On or about October 30, 2000, defendant entered into a license agreement ("the
Concession Agreement") with SRB Catering Corp., d/b/a H.R. Singleton's Classic American
Grille C'SRB Catering"), (Am. Compl., ,r 11 ), in order "to secure the efficient and beneficial
operation of a food and beverage service at the ... Golf Course, and to provide major capital
improvements to the Club House." (Id., Ex. A at 1). Specifically, pursuant to the Concession
Agreement, inter alia, SRB Catering agreed "to maintain and operate a food and beverage
service at the Club House, the Halfway House, and the Driving Range, on the ... Golf Course,"
(id., Ex. A, ,r 2); and "to make capital improvements to the facility, with a total value of
approximately $2,097,000.00," pursuant to plans, specifications and a schedule approved by the
Town, within the first three (3) years of the Concession Agreement. (Id., ,r 39). The Concession
Agreement further provides, inter alia, that "[t]itle to all [capital] improvements shall vest in the
[Town] upon completion and acceptance of the work." (Id., ,I 39(g)).
The term of the Concession Agreement was for a period of twenty (20) years, beginning
Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011 ), and do not constitute findings
of fact by the Court.
2
~
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January 1, 2001, and ending on December 31, 2020, (Am. Com pl., ,I 3 7), but it could be renewed
for a period often (10) years "[a]t the sole option of the [Town]." (Id.) Pursuant to paragraph
thirty-seven (37) of the Concession Agreement, SRB Catering was required to pay the Town a
license fee of forty-eight thousand dollars ($48,000.00), in equal monthly payments of four
thousand dollars ($4,000.00) per month, for the period from January 1, 200 I through December
31, 200 l. (Id.) For each subsequent year, the annual license fee was increased by three percent
(3%) from the previous year. (Id.) However, the Concession Agreement also gave the Town, at
its sole option, "the right to convert th[e] [annual license] payment provision to require [SRB
Catering] to pay [it] a percentage of annual gross receipts." (Id.) In the event that the Town
exercised that option, SRB Catering was required to pay it a yearly license fee equal to (i) five
percent (5%) of annual gross receipts; or (ii) six percent (6%) of annual gross sales if the annual
gross sales of SRB Catering exceeded two million dollars ($2,000,000.00). (Id.) Except as
provided in Paragraph 3 7 of the Concession Agreement, all income derived from the operation of
the Concession Agreement belonged to SRB Catering. (Id., ,I 9). The Concession Agreement
was executed by Harendra Singh ("Singh"), as ''V.P.," presumably vice president, of SRB
Catering, and the then-Town Supervisor, John Venditto ("Venditto"), on behalf of the Town, (id.
at 24-25), pursuant to Town Resolution No. 638-2000, which was adopted on October 3, 2000.
(See Am. CompI., Ex. C at 1, Ex. D at 5 and Ex. F at 1).
On or about April 19, 2005, the Town entered into a license agreement (the "First
Amended Concession Agreement" or "F ACA") with "SRB Convention and Catering Corp., d/b/a
3
~
.~
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Case 2:16-cv-04013-SJ~ .KT Document 21 Filed 05/30/17 ..tQe 4 of 43 PagelD #: 594
The Woodlands and PassionFish" (''SRB Convention")2, (Am. Compl., Ex. B at 1), in order "to
secure the efficient and beneficial operation of a food and beverage concession service at the ...
Golf Course, to accept the major capital improvements heretofore performed by [SRB] to the
Club House, and to provide for future improvements[.]" (Id.) Pursuant to the FACA, inter alia,
SRB Convention agreed "to maintain and operate a food and beverage concession service at the
Club House, the Breakfast House and the Halfway House, and the Driving Range if so requested,
on the ... Golf Course." (Id., Ex. B, ,I 2).
Paragraph 32 of the FACA, under the heading, "Termination of Agreement," provides:
"The [Town} has the right to terminate this [FACA] if
a) [SRB Convention] does not fulfill its obligations, or any part thereof,
with diligence to insure proper services within the term of this [FACA],
including any authorized extension.
b) [SRB Convention] does not comply with all laws, ordinances, rules, or
provisions governing this [F ACA] or is otherwise in violation of any
provision of this [FACA].
c) [SRB Convention] is in violation of any law, rule, regulation or judicial

order applicable to the operation of this [FACA] by [SRB Convention].
d) This [FACA], or any part of it, is subcontracted without first obtaining

the consent of the [Town], which consent shall not be unreasonably
2
Neither party explains the relationship between SRB Convention and SRB Catering, or even
seemingly recognizes that the entity that entered into the Concession Agreement had different
corporate and "doing business as" names than the entity that entered into the subsequent
agreements relating to the Concession Agreement. Instead, both parties merely refer to "SRB,"
as if the two (2) corporate entities are one and the same. That the two (2) entities were not, in
fact, the same is also evidenced by the fact that Singh executed the Concession Agreement in his
capacity as "V.P.," presumably vice president, of SRB Catering, but executed all subsequent
agreements relating to the Concession Agreement in his capacity as president of SRB
Convention. Nonetheless, where it is unclear whether a reference in the pleadings, or documents
attached thereto, relates to either SRB Catering or SRB Convention, the Court, like the parties,
will cite merely to "SRB."
4
,.__
~
Case 2:16-cv-04013-SJ~ ,KT Document 21 Filed 05/30/17 . ..1ge 5 of 43 PagelD #: 595
withheld, provided the subcontract is consistent with the purposes of this

[FACA].
e) This [FACA], or any claim under it, is assigned by [SRB Convention]

in a way not specified in this [F ACA].
f) [SRB Convention] is in default of any of the material terms and

conditions of this [FACA].
g) [SRB Convention] does not timely make the monthly concession

payments.
Upon the occurrence of any of the abovementioned events, the [Town], without
prejudice or waiver of any of its rights or interests under this [FACA], shall give
[SRB Convention] written notice of such default, and [SRB Convention] shall
have sixty (60) days after the receipt ofsaid notice to cure such default. If, after
said period, [SRB Convention] has failed to cure or has not diligently commenced
to cure such default, the [Town] has the right to declare [SRB Convention] in
default of this [F ACA ], to terminate this [F ACA ], and to assume possession and
control of all materials, equipment and operations under this [FACA]. The
[Town] may thereupon undertake all appropriate measures for the completion of
this [F ACA].
In the event the [Town] terminates this [FACAJ for any reason other than the
default of [SRB Convention], the [Town] shall pay to {SRB Convention] a sum
equal to 4% of the capital improvements made to the facility by [SRB
Convention],for each year or part of a year remaining in this {FACAJ, up to
100% of the value of said improvements. In addition, the [Town] will pay [SRB
Convention] for lost profits on catering events which were booked prior to a
termination for any reason other than the default of{SRB Convention], subject to
an offset for deposits being held by [SRB Convention] for said events.
[SRB Convention] shall notify the [Town] of the name, address and telephone
number of each financing entity. The [Town] shall notify each financing entity, of
which the [Town] has notice, of the occurrence of any of the events listed in the
herein Paragraph. Such financing entity shall have the right to cure any default,
consistent with the provisions contained in the herein Paragraph. In the event of a
default of [SRB Convention], the financing entity shall be entitled to receive any
payments then due to [SRB Convention] by the [Town]."
(Am. Compl., Ex. B, ,J 32) (italicized language was subsequently amended as set forth below).
Paragraph 37 of the FACA provides, in pertinent part:
5
.....__ Document 80 Filed 08/28/17 Page 193 of 255 PageID #: 1834
Case 2:16-cv-04013-SJ~ ,KT Document 21 Filed 05/30/17 . -'ge 6 of 43 PagelD #: 596
"The term of the original [Concession Agreement] was for a period of twenty
years, beginning January 1, 2001, and ending on December 31, 2020. The
original [Concession Agreement] provided for a ten-year renewal, at the option of
the [Town]. In light of the financial obligations entered into by [SRB] in
performing the capital improvements, which exceeded its contractual obligation
by more than one hundred percent, the [Town] hereby exercises the renewal.
Accordingly, this [FACA] shall be effective through December 31, 2029."
(Am. Compl., Ex. B, ,r 37). The payment provisions in the FACA remained the same as in the
original Concession Agreement.
Paragraph 39 of the FACA provides, in pertinent part:
"a) In the original [Concession Agreement], [SRB] agreed to make capital

improvements to the facility, with a total value of approximately
$2,097,000.00. [SRB] has presented paid invoices to the [Town]
indicating that the project cost to date is $4,462,715.00. The [Town] had
an independent firm review the invoices, and perform a visual inspection
of the work performed. Based upon said review, a value of$4,600,000.00
was established for the work. The [Town] hereby accepts the capital
improvements to the Golf Course Club House.
b) [SRB] may make additional capital improvements to the facility, at its own
cost and expense, with no setoff from the concession payment to the
[Town], however all such capital improvements must be approved by the
[Town].
d) Title to all capital improvements shall vest in the [Town] upon completion
and acceptance of the work .... "
(Am. Compl., Ex. B, ,r 39). The FACA was executed by Singh, as President of SRB Convention,
and Venditto, on behalf of the Town, (id. at 22-23), pursuant to Town Resolution No. 3 I 3-2005,
which was adopted on April 19, 2005. (See Id., Ex.Cat 1, Ex. D at 5 and Ex.Fat 1).
On September 16, 2008, the Town and SRB Convention entered into an agreement ("the
Extension Agreement"), indicating, inter alia, that
6
~ 194 of 255 PageID #: 1835
Case 2:16-cv-04013-SJ~ XT Document 21 Filed 05/30/17 . .ige 7 of 43 PagelD #: 597
"since 2005, [SRB Convention] has made additional capital improvements ofup
to $359,167.11, and has now proposed to make an additional $3,250,000.00 in
capital improvements, to the [Golf Course Facilities], within the next three years,
which improvements would enhance the [Golf Course], and would greatly benefit
the residents of the [Town]; and ... in light of the financial obligations [SRB
Convention] would incur in performing the capital improvements, [SRB
Convention] has requested that the abovementioned agreement be extended[.]"
(Am. Compl., Ex.Cat 1-2). Pursuant to the Extension Agreement, SRB Convention agreed "to
make an additional $3,250,000,00 in capital improvements to the [Golf Course Facilities]," to be
completed by December 31, 2011; and the Town extended the FACA through December 31,
2049, in consideration of the additional capital improvements to be made by SRB Convention.
(Id. at 2). The Extension Agreement was executed by Singh, as president of SRB Convention,
and Venditto, (id. at 2-3), pursuant to Town Resolution No. 889-2008, which was adopted on
September 16, 2008. (See Id., Ex. D at 5 and Ex. F at 1).
According to plaintiff, "[s]ometime during 2010, SRB determined that it would require
financing to, inter alia, properly operate the Facilities and complete the improvements required
by the terms of [the Extension Agreement]." (Am. Compl., 122). SRB Convention subsequently
entered into negotiations with NOH Capital Corporation C'NDH"), a loan broker for plaintiff,,,
(Id., 1123-24); however, "[o]ne of the issues that made it difficult for SRB to obtain financing
was the simple fact that it had no collateral to support any potential loan." (Id., 1 25). According
to plaintiff, "[i]n the absence of any such collateral, [it] was unwilling to commit to loan money
to SRB," (Id., 126), so "SRB, NDH and [plaintiff] entered into negotiations with [defendant] to
structure a transaction that would assure that [plaintiff] would receive significant monies from
[defendant] in the event that SRB defaulted in its repayment obligations[,] ... [which] would ...
be utilized to satisfy the loan made to SRB." (Id., 127) (emphasis added). Specifically, "counsel
7
Case 2:16-cr-00540-JMA-SIL~
~
195 of 255 PageID #: 1836
Case 2:16-cv-04013-SJF- .t<T Document 21 Filed 05/30/17 . -'-ge 8 of 43 PagelD #: 598
for SRB, NOH, [plaintiff] and [defendant] collaboratively created a vehicle whereby, should
SRB default on the subject loan, the Concession Agreement would automatically be terminated
and, in tum, [defendant] would be required to make a 'Termination Payment' to [plaintiff]." (Id.,
,r 28) (italics omitted). Plaintiff alleges that the "'Termination Payment' would, in effect, make
[it] whole because it was specifically formulated to equal the amounts then outstanding under the
loan made by PHL/NOH to SR_B." (Id.) Plaintiff further alleges that, "[a]ltematively, if
[defendant] for some reason terminated the Concession Agreement (other than as a consequence
of SRB's default on the subject loan), [defendant] would then be obligated to pay [plaintiff] a
'Cause Termination Payment' based on the agreed value of the improvements made by SRB."
(Id.) (italics omitted).
According to plaintiff, "[a]s a result of the successful conclusion of those negotiations,
NOH/PHL agreed to provide financing to SRB in the amount of $7,843,138.08, inclusive of
interest ('Loan')." (Am. Compl., ,r 29) (emphasis omitted). The Loan was evidenced by a "Term
Loan, Pledge and Security Agreement" by and between NOH and SRB Convention, dated
November 18, 2011 (''the Security Agreement"), (id., Ex. O); and a "Negotiable Promissory
Note" by and between NOH and SRB Convention, also dated November 18, 2011 ("the Note")
(collectively, the "2011 Loan Documents"). (Id., Ex. E).
On that same date, i.e., November 18, 2011, the Town and SRB Convention ostensibly
entered into an "Amendment to Concession Agreement" (the "Second Amended Concession
Agreement" or "SACA"), pursuant to which the Town "agreed to amend the [FACA] to provide
for payment of certain amounts under the [F ACA] to [plaintiff] should [SRB Convention] default
in its obligations to [plaintiff)," in order to induce plaintiff to provide the financing SRB
8
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Case 2:16-cv-04013-SJF- ,,<T Document 21 Filed 05/30/17 . Age 9 of 43 PagelD #: 599
Convention was seeking "to facilitate the completion of the capital improvements" at the Golf
Course, "and in consideration of the benefits the [Town] has and will continue to receive from
the previous and proposed capital improvements[.]" (Am. Compl., Ex.Fat 2) (emphasis added).
The SACA amended paragraph thirty-two (32) of the FACA, set forth above, by, inter
alia, (1) renaming the heading from "Termination of Agreement" to "Events of Default;" (2)
replacing the lead-in paragraph, italicized above, with the statement, "Any of the following
events shall constitute an Event of Default under this Agreement[;]" and (3) adding the following
subparagraph (h) as an "Event of Default:"
"h) The receipt by the Town on written notice (a 'Loan Default Notice') from the
Lender [defined therein as NOH and its successors or assigns, i.e., plaintiff] of the
occurrence of a default or event of default, beyond any applicable period for grace
and cure, under (A) that certain Promissory Note dated as of October 27, 2011
[sic] in the face amount of$7,843,138.08 inclusive of interest as set forth therein .
. . executed and delivered by [SRB Convention] to NOH ... and/or (B) that
certain Term Loan, Pledge and Security Agreement dated as of October 27, 2011
[sic] between [SRB Convention] and NOH ... (a 'Loan Default'). With respect
to any Loan Default under this subparagraph (h) of this Section 32 of this
[SACA], [SRB Convention's] period of grace and cure shall be controlled by the
Loan Documents, and the 60 day period set forth in the full paragraph following
this subparagraph (h) [italicized above] shall not apply."
(Am. Compl., Ex.Fat 2-3) (emphasis omitted). In addition, the SACA deleted the second to last
paragraph of Paragraph 32 of the FACA, italicized above, and replaced it with the following:
"Effective as of the date hereof, and for so long as [SRB Convention] shall owe
any obligation to [NOH or plaintiff] ... under the Loan Documents, the [Town]
shall make all amounts payable by the Town under this Section 32 (the
'Termination Payment' as hereinafter defined) to NOH [or plaintiff] ....
Notwithstanding anything to the contrary contained in this [SACA], and
irrespective of any amounts paid by [SRB Convention] to the [Town], the status
of the capital improvements or any event of default hereunder, the parties hereto
agrees [sic] as follows:
i) Upon the occurrence ofan Event of Default under subsection (h) of this
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Section 32 and the expiration of any applicable grace or cure periods,

[SRB Convention] expressly acknowledges and agrees that the [F ACA, as
amended by the SACA] shall be deemed terminated by the Town without
further notice to [SRB Convention]. [SRB Convention] hereby
irrevocably authorizes and instructs the [Town] to pay the Termination
Payment to [NDH or plaintiff], in one lump sum, within sixty (60) days
following receipt of notice by [NOH or plaintiff] to the [Town] of such
Event of Default and the expiration of any applicable cure periods. The
Termination Payment shall equal the sum of (a) the Prepayment Amount
set forth in the [Security] Agreement together with (b) all other amounts
due and to become due under the [2011] Loan Documents, including, but
not limited to any and all late interest, fees, costs, expenses and attorney's
fees which may have accrued from the date of such default through the
date of payment (the 'Default Amount'). The obligation of the [Town] to
make the Termination Payment shall not be subject to any conditions
precedent ... [or] any defenses, including but not limited to, the defense
of bankruptcy or insolvency of [SRB Convention], set off, counterclaim or
recoupment which the [Town] may have against [SRB Convention], for
any reason whatsoever, including any circumstance whatsoever which
might constitute a legal or equitable discharge or defense of the [Town].
ii) In the event the [Town] terminates this [FACA, as amended by the
SACA] prior to December 31, 2025 whether resulting from an event of
default as set forth in subsection (a) through (g) of this Section 32 by [SRB
Convention] or otherwise, (beyond the expiration of applicable grace and
cure periods), [SRB Convention] hereby irrevocably authorizes and
instructs the [Town] to pay the Termination Payment due under this
[SACA] to [NOH or plaintiff] to satisfy in full all of [SRB Convention's}
obligations to [NDH or plaintifJJ. The [Town] shall make the payments to
[NDH or plaintiff] within sixty (60) days of the date of such termination.
Said termination payment shall be calculated by multiplying (A) 5% of the
total capital improvements made to the [Golf Course Facilities] by [SRB
Convention] calculated as of the date of termination, by (B) the number of
years, or part of a year, remaining in the initial term of this [F ACA, as
amended by the SACA], including any remaining renewal options, but in
no event to exceed 100% of the value of said improvements (the 'Cause
Termination Payment').
(iii) 'Termination Payment' shall mean collectively, the Cause

Termination Payment and the Default Amount .... Further, upon
payment in full of the Termination Payment by the Town in accordance
with the terms of this Section 32, (I) the Town will have purchased all
right, title and interest of [SRB Convention] in and to the capital
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improvements made by [SRB Convention] to the [Golf Course Facilities]

and all machinery, equipment, furniture, fixtures, materials and other
property of [SRB Convention] located at or used in the connection with
the operation of the [Golf Course Facilities] (the 'Purchased Property'),
and (II) any and all security, interests, liens or encumbrances in the
Purchased Property in favor of [NOH or plaintiff], if any, shall be released,
satisfied and/or terminated by [NOH or plaintiff] ...."
(Id. at 3-5) (emphasis omitted; italics added).
In addition, the SACA provides, in pertinent part, as follows:
"[] [SRB Convention] has assigned all of its rights to payment by the [Town]
under the [F ACA] as amended by this [SACA] to [NOH or plaintiff] pursuant to
an Assignment of Concession Agreement Proceeds dated as of November 18,
2011 (the 'Assignment'). The [Town] acknowledges [NOH's or plaintiffs] rights
under the Assignment and [NOH's or plaintiffs] security interest under the
payments due under the [F ACA, as amended by the SACA] and irrevocably
agrees to pay the Payment Amounts (as such tennis defined in the Assignment) in
accordance with the instructions set forth in Exhibit A to the Assignment (or such
other instructions as [NOH or plaintiff] may provide to the [Town] from time to
time).
[] For purposes of calculation of the Cause Termination Payment pursuant to

Section 32(ii) of the [SACA], ... the [Town] and [SRB Convention] each
confirms that the aggregate value of the capital improvements as of the date
hereof are $10,000,000.00 ....
[] Except as set forth in this Amendment, the parties hereby agree that all
remaining terms of the [FACA] shall remain in full force and effect."
(Am. Compl., Ex. F, ~ 4, 5 and 9).
Singh, as president of SRB Convention, signed the SACA on behalf of SRB Convention.
However, unlike the Concession Agreement, the F ACA and the Extension Agreement, which had
all been executed by Venditto, as the then-Town Supervisor, pursuant to a resolution adopted by
the Town Board, the SACA was executed by Leonard Genova ("Genova"), as the Town
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Attorney; it was not executed by the Town Supervisor, (Am. Compl. at 7-8; see id., ,r 31), nor is
there any indication in the pleadings, or in any of the documents attached thereto, that it was ever
ratified by the Town Board.
Plaintiff alleges that "[i]n connection with documentation of the Loan, NOH and PHL
conditioned their respective willingness to make and fund the Loan on the provisioning by [the
Town's] counsel of a letter substantiating, inter alia, the validity and enforceability of[the
Town's] obligations to make the Termination Payment or the Cause Termination Payment in
accordance with the terms and provisions of [the SACA][,]" (Am. Compl., ,I 35 at p. 13 3); and
that the Town was represented by Harris Beach, PLLC ("Harris Beach") and its own deputy town
attorney, Frederick E. Mei ("Mei"), in connection with the negotiation of the Loan. (Id., ,r 36 at
p. 13). By letter to NOH dated November 16, 2011 ("the Harris Beach Letter"), William J.
Garry, Esq. ("Garry"), on behalf of Harris Beach, indicated, in relevant part, that in his opinion:
"1. [The Town] ... has the power and authority to conduct the business
described in the [Town] Documents [identified therein as "the
representations and warranties contained in" the Concession Agreement,
as amended; the Assignment; Town Resolution No. 638-2000, dated
Octobet 3, 2000; Town Resolution No. 313-2005, dated April 19, 2005;
Town Resolution No. 889-2008, dated September 16, 2008; Town
Resolution No. 605-2010, dated June 8, 2010 4 ; "and other documents or
certificates executed or delivered in connection therewith").
3
After paragraph forty (40) on page eleven ( 11) of the amended complaint, the paragraph
numbers erroneously repeat for each cause of action. Accordingly, the misnumbered paragraphs
are cited according to their paragraph number, page number and, when necessary, the "Count"
number.
4
There is no indication in the pleadings or papers submitted in support of, or in opposition to,
defendant's motion to dismiss as to the subject of Resolution No. 605-2010, which was adopted
on June 8, 2010, i.e., approximately seventeen ( 17) months before plaintiff made the loan to SRB
Convention and the SACA was executed by SRB Convention and Genova.
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2. [The Town] Documents have been duly authorized by all necessary action
of [the Town] and have been duly executed and delivered by [the Town].
3. [The Town] Documents are the valid binding obligations of [the Town],
enforceable in accordance with their respective terms by NOH and its
successors and assigns.
6. The Assignment of Concession Proceeds creates in favor ofNDH and its

assigns, a legal, valid, first-priority security interest in the payments due to
Improvements to the Facility made by [SRB Convention] under the
[Concession] Agreement [as amended]. [The Town's] payment provisions
as set forth under the [Concession] Agreement [as amended] are not
subject to any conditions precedent to funding and are not subject to any
off-sets, reductions or defenses to satisfy [the Town's] obligations.
These opinions are limited to the extent enforceability may be limited by

bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws of general applicability relating to or affecting the enforcement of
creditors [sic] rights and by the effect of general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
These opinions are provided solely for NOH ... and may only be relied upon by
its successors and assigns. I am under no obligation to update this opinion letter
after the date hereof."
(Am. Compl., Ex. I).
By letter to NOH that same date ("the Mei Letter"), Mei provided opinions virtually
identical to Garry's opinions in the Harris Beach Letter. (Am. Compl., Ex. K).
On or about June 16, 2015, Thomas M. Sabellico, Esq., as special counsel to Genova, the
then-Town Attorney, sent NOH a letter ("the Genova Letter") indicating, in pertinent part:
"This letter serves as notice that the November 2011 [SACA] is null and void ...
[and] that the November 2011 Purported Assignment is null and void insofar as it
purports to impose duties on the Town.
The November 2011 [SACA] and ... Purported Assignment are null and void
because, among other reasons, they each purport to make the Town a guarantor of
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[SRB Convention's] loan, which violates Article VIII, 1 of the New York State
Constitution, and neither was authorized by a Town Board resolution, as required
under New York State Town Law 64(6)."
(Am. Compl., Ex. J).
"SRB ultimately defaulted on its obligations to [plaintiff]. ... " (Am. Compl., ,r 35). On
or about November 19, 2015, plaintiff sent SRB Convention a "Third Notice of Acceleration,"5
indicating, in relevant part:
"Neither SRB Concession nor SRB Convention has made all the payments,
including but not limited to attorneys' fees, due and payable pursuant to the Loan
Documents and the Prior Notices of Acceleration [sent on or about August 5,
2015 and October 7, 2015] .
. . . SRB Convention [also] failed to make the payment required under the [2011]
Loan Documents within five business days of October 18, 2015. Therefore, it is
in default of the [2011] Loan Documents.
Each of these failures constitutes a separate Event of Default under the Loan
Documents. (See,~ ... November 8, 2011 [Security] Agreement at Paragraph
9[6]; Letter Amendment to the [2011] Loan Documents Re Cross-Default, by and
s The Third Notice of Acceleration indicates, inter alia, that it was made pursuant to: ( 1) the
2011 Loan Documents, which were assigned to plaintiff; and (2) "[t]he Term Loan, Pledge and
Security Agreement dated as of June 22, 2012 pursuant to which NDH loaned SRB Concession
Inc. ("SRB Concession") $12,273,748.80, inclusive of interest ... , and the Negotiable
Promissory Note evidencing that loan, dated June 22, 2012 ... ['the 2012 Loan Documents'],"
which were assigned to Phoenix Life Insurance Company ("Phoenix"). (Am. Compl., Ex. G).
6
Paragraph 9 of the Security Agreement provides, in pertinent part, that "[ a]n Event of Default
shall occur if: (a) [SRB Convention] shall fail to pay within five (5) business days after the date
due, whether at maturity, by acceleration or otherwise, any installment on the [2011] Note; or (b)
[SRB Convention] shall fail to observe or perform any of its covenants contained herein, and
such failure shall continue for a period of thirty (30) days after written notice from [NDH or
plaintiff] to [SRB Convention]; or (c) An event of default shall occur under the Concession
Agreement, and shall not be cured within the applicable cure period; or (d) Any representation,
warranty, certification or statement made by [SRB Convention] in this [Security] Agreement, or
in any certificate, financial statement or other document delivered to [NDH or plaintiff] pursuant
14
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between SRB Convention, SRB Concession, NOH, [the Town], and [plaintiff],
dated June 22, 2012 7.)
PLEASE TAKE NOTICE THAT pursuant to Paragraph l0(b) of the November

18, 2011 [Security] Agreement you have ten ( 10) days from receipt of this letter
(the 'Cure Period') to cure all Events of Default.
That cure must include the payment of all outstanding amounts due, plus interest
at the 'Default Rate' (as defined in the Loan Documents) from the date the
payment was due to the date of cure, plus the attorneys' fees and costs due under
the Loan Documents. (See,~ November 18, 2011 [Security] Agreement at
Paragraphs 3(b), 9 & l0(b).)
Therefore, in order to cure the defaults under the Loan Documents, the following
must be done within ten days from receipt of this letter:
(iii) SRB Convention must pay to [plaintiff] by good certified or bank

cashier's check the October payment of $73,529.42, plus Default Interest
of $24.17 per day from October 19, 2015 until the date the payment is
tendered; and
to or in connection with this [Security] Agreement or the making of the [2011] Loan shall prove
to have been misleading or incorrect in any material respect when made and shall fail to have
been cured within thirty (30) days of notice thereof to [SRB Convention] and the Town and shall
remain material; or (e) [SRB Convention] or the Town commence [sic] a voluntary case or other
proceeding seeking dissolution, liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to
pay its debts as they become due, or shall take any action to authorize any of the foregoing; or ( t)
An involuntary case or other proceeding shall be commenced against [SRB Convention] or the
Town seeking dissolution, liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding shall remain
undismissed for a period of 60 days." (Am. Compl., Ex. D, ,r 9).
7
Plaintiff did not attach a copy of the June 22, 2012 Letter Amendment to the amended
complaint, and neither party makes any reference to it.
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(iv) SRB Convention must pay to [plaintiff] the attorneys' fees referenced
in the Prior Notices of Acceleration plus additional attorneys' fees
subsequently incurred in the amount of $22,019.
Without prejudice to ... [plaintiffs] rights to acceleration as a result of the Prior

Notices of Acceleration, if SRB Convention ... fail[s] to cure all Events of
Default within ten ( 10) days from receipt of this letter, the full Acceleration
Amount (as defined in the Loan Documents) will become immediately due and
payable, without further notice or demand, with interest thereon at the Default
Rate, together with legal fees and costs of suit and enforcement.
For your information, the Acceleration Amount shall be equal to the sum of (i)
any past due payments plus Default Interest and the attorneys' fees specified in the
Prior Notices of Acceleration, plus (ii) $5,290,654.76, which is the sum as of the
last day of the Cure Period of the remaining payments due under the [2011] Loan
Documents, discounted to their present value in accordance with the terms of the
[2011] Loan Documents."
(Am. Compl., Ex. G) (emphasis omitted).
On or about February 26, 2016, Phoenix, on behalf of plaintiff, sent the Town a "Loan
Default Notice," indicating, in pertinent part:
"This letter will serve to inform you that neither SRB Concession nor SRB
Convention has cured the defaults referenced in the [November 19, 2015 Third
Acceleration Notice] and, accordingly, the full Acceleration Amount (as defined
in the November 18, 2011 Loan Agreement) is now due and payable along with,
but not by way of limitation, accruing default interest, attorneys' fees, and costs of
suit.
At present, the Prepayment Amount due under the November 18, 2011 Loan
Agreement is calculated [to be five million four hundred thousand two hundred
fifty-two dollars and seventy-seven cents ($5,400,252. 77)].
In accordance [with Section 32 of the FACA, as amended by the SACA], PHL

hereby demands payment from [the Town] of the Termination Payment. Such
payment is, pursuant to the [F ACA, as amended by the SACA], to be made, in one
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lump sum, within sixty (60) days of your receipt of this notice .... "
(Am. Compl., Ex. H) (emphasis omitted). Plaintiff alleges that it is an intended third-party
beneficiary of the FACA, as amended by the SACA, (id., 139); that the Town tenninated the
Concession Agreement, but "failed and/or refused to remit the Tennination Payment to PHL, all
in violation of the tenns of the Concession Agreement (as amended)[,]" (id., ,i 37 and ,i 36 at p.
12); and that the amount due and owing under the 2011 Loan Documents, as of June 1, 2016, is
six million two hundred fifty-two thousand six hundred twenty-three dollars and eighty-two cents
($6,252,623.82), with additional amounts accruing "with the passage of time." (Id., ,i 38).
B. Procedural History
On or about July 19, 2016, plaintiff commenced this action against defendant pursuant to
this Court's diversity of citizenship jurisdiction under 28 U.S.C. 1332, asserting claims
seeking damages for breach of contract, unjust enrichment, fraud, innocent misrepresentation and
negligent misrepresentation. On July 27, 2016, plaintiff filed an amended complaint asserting
the following claims: (I) that the Town breached the Concession Agreement, as amended, by
failing and refusing to pay plaintiff the Tennination Payment (first cause of action for breach of
contract), (see Am. Compl., ,i 40); (2) that "to the extent the Tennination Payment is, for some
reason, not properly payable to [the Town], the provisions requiring payment of the Cause
Tennination Payment to [plaintiff]" were triggered, yet the Town "has failed to remit the Cause
Tennination Payment to [plaintiff], all in violation of the tenns of the Concession Agreement (as
amended)" (second cause of action for breach of contract), (id.,~ 36-37 at p. 12, Count II)
(emphasis omitted); (3) that the Town "was unjustly, unfairly and inequitably enriched to the
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extent [plaintifrs] funds were utilized to improve and/or operate the Facilities[,] ... at the
expense and to the detriment of [plaintiff][,]" and "[b]oth equity and good conscience dictate that
[it] should reimburse [plaintiff] for any improvements to the Facilities made by SRB with
[plaintifrs] funds" (third cause of action for unjust enrichment) (id., 1135-37 at p. 12, Count III);
(4) that "[t]o the extent [the Town] is correct with respect to the legal assertions contained within
the Genova Letter, it necessarily follows that" Garry's representations in the Harris Beach Letter,
Mei's representations in the Mei Letter and Genova's representation in the SACA that the Town
"has agreed to amend the [FACA] to provide for payment of certain amounts under that
Agreement to [plaintiff] should SRB default in its obligations to [plaintiff]," all of which were
made for the benefit, or on behalf, of the Town, were untrue, and NOH and plaintiff reasonably
relied to their detriment on those representations by funding the Loan, which "is presently
uncollectable from SRB" (fourth, fifth and tenth causes of action for innocent misrepresentation),
(id., ,r,r 40-43 at p. 14; ,r,r 40-43 at p. 16; ,r,r 36-37 and 39-41 at pp. 22-23, respectively) (italics
and brackets omitted); (5) that Harris Beach, Mei and Genova, acting for the benefit, or on
behalf, of the Town, knew or should have known that the representations in the Harris Beach
Letter, Mei Letter and SACA, respectively, were untrue, and NOH and plaintiff reasonably relied
to their detriment on those representations by funding the Loan, which "is presently uncollectable
from SRB" (sixth, seventh and eleventh causes of action for negligent misrepresentation), (id., 11
41-44 at p. 17; ,i,i 41-44 at p. 18; and ,i,r 40-42 at p. 24, respectively) (italics omitted); and (6)
that Harris Beach, Mei and Genova, acting for the benefit, and on behalf, of the Town, and "in
reckless disregard of the truth," ''stated facts that were claimed to be known as true" in the Harris
Beach Letter, Mei Letter and SACA, respectively, "when, in point of fact, [they] had no
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reasonable basis for" making those representations, knowing and intending that NOH and/or
plaintiff would rely on those assertions, and NOH and plaintiff reasonably relied to their
detriment on those representations by funding the Loan, which "is presently uncollectable from
SRB" (eighth, ninth and twelfth causes of action for fraud), (id., ,r~ 41-46 at pp. 19-20; ~~ 41-46
at p. 21; and ,r,r 40-44 at p. 25, respectively) (italics omitted).
Defendant now moves pursuant to Rule l 2(b )( 6) of the Federal Rules of Civil Procedure
to dismiss plaintiffs claims against it in the amended complaint for failure to state a claim for
relief.
II. DISCUSSION
A. Standard of Review
The standard of review on a motion made pursuant to Rule 12(b)(6) of the Federal Rules
of Civil Procedure is that a plaintiff plead sufficient facts "to state a claim for relief that is
plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1974, 167 L.
Ed 2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009). The
plausibility standard requires "more than a sheer possibility that a defendant has acted
unlawfully." Id.
"A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements
of a cause of action will not do."' Iqbal, 556 U.S. at 678, 129 S. Ct. 1937 (quoting Twombly,
550 U.S. at 555, 127 S. Ct. 1955). ''Nor does a complaint suffice if it tenders 'naked
19
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assertion[s]' devoid of 'further factual enhancement."' Id. (quoting Twombly, 550 U.S. at 557,
127 S. Ct. 1955). "Factual allegations must be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in the complaint are true (even if
doubtful in fact)." Twombly, 550 U.S. 544, 127 S. Ct. at 1959.
In deciding a motion pursuant to Rule 12(b)(6), the Court must liberally construe the
claims, accept all factual allegations in the complaint as true, and draw all reasonable inferences
in favor of the plaintiff. See Aegis Ins. Servs., Inc. v. 7 World Trade Co., L.P., 737 F.3d 166, 176
(2d Cir. 2013) (quotations and citation omitted); Gntllon v. City of New Haven, 720 F.3d 133,
139 (2d Cir. 2013). However, this tenet "is inapplicable to legal conclusions. Threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do not
suffice." Iqbal, 556 U.S. at 678, 129 S. Ct. 1937. "While legal conclusions can provide the
framework of a complaint, they must be supported by factual allegations." Id. at 679, 129 S. Ct.
1937. "In keeping with these principles a court considering a motion to dismiss can choose to
begin by identifying pleadings that, because they are no more than conclusions, are not entitled to
the assumption of truth." Id.; see also Ruston v. Town Bd. of Town of Skaneateles, 610 F.3d 55, ,,
59 (2d Cir. 2010).
Nonetheless, a plaintiff is not required to plead "specific evidence or extra facts beyond
what is needed to make the claim plausible." Arista Records, LLC v. Doe 3,604 F.3d 110, 120-1
(2d Cir. 201 O); accord Pension Benefit Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret.
Plan v. MQrgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 729-30 (2d Cir. 2013). "When there are
well-pleaded factual allegations, a court should assume their veracity and then determine whether
they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 679, 129 S. Ct. 1937.
20
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In deciding a motion pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure,
the Court must limit itself to the facts alleged in the complaint, which are accepted as true; to any
documents attached to the complaint as exhibits or incorporated by reference therein; to matters
of which judicial notice may be taken; or to documents upon the terms and effect of which the
complaint "relies heavily" and which are, thus, rendered "integral" to the complaint. Chambers
v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002); see also ASARCO LLC v. Goodwin,
756 F.3d 191, 198 (2d Cir. 2014). Accordingly, the Court has not considered any of the
extrinsic evidence submitted by the parties in support of, or in opposition to, defendant's motion
to dismiss.
B. Breach of Contract Claims
Under New York law, "[p ]arties asserting third-party beneficiary rights under a contract
must establish ( 1) the existence of a valid and binding contract between other parties, (2) that the
contract was intended for their benefit and (3) that the benefit to them is sufficiently immediate,
rather than incidental, to indicate the assumption by the contracting parties of a duty to
compensate them if the benefit is lost[.]" Mendel v. Henry Phipps Plaza West, Inc., 6 N.Y.3d
783, 786,811 N.Y.S.2d 294, 844 N.E.2d 748 (N.Y. 2006) (quotations, alterations and citation
omitted); accord Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 181-82, 919 N.Y.S.2d
465, 944 N.E.2d 1104 (N.Y.2011).
1. Existence of a Valid and Binding Contract
"[A] municipality's power to contract is statutorily restricted for the benefit of the
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public." Genesco Entm 't, a Div. of Lymutt Indus., Inc. v. Koch, 593 F. Supp. 743, 748 (S.D.N.Y.
1984); see also Scarborough Props. Corp. v.. Village of Briarcliff Manor, 278 N.Y. 370, 375-76,
16 N.E.2d 369 (N.Y. 1938) ("The power of a [municipality] to enter into contracts and to incur
financial obligations is subject to statutory conditions and restrictions intended to protect the
inhabitants and taxpayers against ill-considered or extravagant action.") "Town Law 64(6)
demands that a formal resolution be passed by the Town Board and executed by the Town
Supervisor in the name of the Town before a Town can be bound by any contract." Verifacts
Grp., Inc. v. Town of Babylon, 267 A.D.2d 379, 379, 700 N.Y.S.2d 75 (N.Y. App. Div. 1999);
see also Glenville Police Benevolent Ass'n v. Mosher, 31 A.D.3d 874,875,816 N.Y.S.2d 915
(N.Y. App. Div. 2006) ("Town Law 64(6) makes abundantly clear that a town cannot be bound
contractually unless the contract has been approved by the town board and executed by the
supervisor in the town's name.") "Absent strict compliance with the formal requirements of this
statute, no valid contract binding a Town may be found to exist." Verifacts, 267 A.D.2d at 379,
700 N.Y.S.2d 75; see also Granada Bldgs., Inc. v. City of Kingston, 58 N.Y.2d 705, 708, 458
N.Y.S.2d 906,444 N.E.2d 1325 (N.Y. 1982) ("Municipal contracts which violate express
statutory provisions are invalid[.]"); Mans Constr. Oversite, Ltd. v. City of Peekskill, 114 A.D.3d
911, 911-12, 980 N.Y.S.2d 822 (N.Y. App. Div. 2014) ("A municipal contract which does not
comply with statutory requirements or local law is invalid and unenforceable[.]" (quotations and
citation omitted)); Goldberg v. Penny, 163 A.D.2d 352, 353 (N.Y. App. Div. 1990) ("It is
fundamental that a municipality can only contract for an authorized purpose and then only in the
manner provided by statute.") Indeed, to allow recovery under a contract which contravenes
statutory restrictions on a municipality's power to contract "gives vitality to an illegal act and
22
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grants the municipality power which it does not possess 'to waive or disregard requirements
which have been properly determined to be in the interest of the whole."' Genesco Entm 't, 593
F. Supp. at 748 (quotinglutzken v. City of Rochester, 7 A.D.2d 498,499, 184 N.Y.S.2d 483
(N.Y. App. Div. 1959)); see also City of New York v. City Merch., Inc., 211 F. App'x 44, 46 (2d
Cir. Jan. 8, 2007) (summary order) ("When a statute is ... designed to protect the public from
governmental misconduct or improvidence, ... its requirements cannot be waived[.]" (quotations
and citations omitted)). "A party contracting with a municipality is chargeable with knowledge
of the statutes which regulate its contracting powers and is bound by them[.]" Parsa v. State of
New York, 64 N.Y.2d 143, 147,485 N.Y.S.2d 27,474 N.E.2d 235 (N.Y. 1984); see also Field
Day, LLC v. County of Suffolk, 799 F. Supp. 2d 186, 195 (E.D.N.Y. 2011) (accord); Town of
Oneonta v. City of Oneonta, 191 A.D.2d 891,892,594 N.Y.S.2d 838 (N.Y. App. Div. 1993)
("The powers of a municipal corporation are wholly statutory and every person who deals with
such a body is bound to know the extent of its authority and the limitations on its power[.]")
Since there is no indication in the amended complaint that the SACA was ever approved
,, by the Town Supervisor or ratified by the Town Board, the amended complaint fails to state a
plausible claim that a valid and binding contract existed between SRB Convention and the Town
that was intended for plaintiffs benefit. See, e.g. Merrick Gables Ass 'n, Inc. v. Town of
Hempstead, 691 F. Supp. 2d 355, 363 (E.D.N.Y. 2010) (dismissing the plaintiffs' breach of
contract claim because there was no indication that the alleged agreement were ever approved by
the Hempstead Town Supervisor or ratified by the Hempstead Town Board); Plaza Drive Grp. of
CNY, LLC v. Town of Sennett, 115A.D.3d1165, 982 N.Y.S.2d 610 (N.Y. App. Div. 2014)
(granting judgment in favor of the Town of Sennett declaring that a certain unsigned letter
23
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agreement was not a binding contract and was unenforceable against it because the plaintiff had
not alleged that the Sennett Town Board considered or approved the letter agreement as required
by [N.Y.] Town Law 64(6) so as to establish a valid contract.) Indeed, it is clear from the
documents attached to the amended complaint that, unlike the Concession Agreement, the FACA
and the Extension Agreement, which were all executed by Venditto as the then-Town Supervisor,
the SACA was executed by Genova, as the then-Town Attorney; not by the Town Supervisor.
(See Am. Compl., Ex. F). In addition, although the Harris Beach Letter, the Mei Letter and the
SACA refer to the Town Resolutions approving the prior agreements relating to the SACA, (see
id., Exs. F, I and K), there is no indication in those documents, the pleadings or any of the other
documents attached to the amended complaint that the Town Board ever passed a Town
Resolution approving the SACA. 8
The unreported decision and order of the New York State Supreme Court, County of
Nassau, Atalaya Asset Income Fund II LP v. HVS Tappan Beach Inc., No. 600517-16 (N.Y. Sup.
Ct. Oct. 12, 2016), upon which plaintiff relies, is not binding on this Court and, in any event, is
8
Even were the Court to consider Town Resolution No. 256-2010, which plaintiff submitted in
opposition to defendant's motion to dismiss, that resolution merely "authorized and directed" the
Town Supervisor "to enter into an agreement with [SRB Convention's and SRB Concession's]
bank relating to the loan, and an agreement with [SRB Convention and SRB Concession]
regarding the use of the loan proceeds at [the Golf Course and TOBAY Beach], subject to the
negotiation ofacceptable terms in said agreements." (Plaintiffs Memorandum of Law in
Opposition to Defendant's Motion to Dismiss ["Plf. Opp."], Ex. D) (emphasis added). That
resolution is nothing more than an unenforceable "agreement to agree, in which ... material
term[s] [are] left for future negotiations[.]" 166 Mamaroneck Ave. Corp. v. 151 E. Post Rd.
Corp., 78 N.Y.2d 88, 91, 571 N.Y.S.2d 686, 575 N.E.2d 104 (N.Y. 1991); see also Shepherd v.
Whispering Pines Inc., 188 A.D.2d 786, 789 (N.Y. App. Div. 1992) (holding that the Town's
resolution authorizing the Town Board to enter into an agreement for the purchase of a
campground constituted an unenforceable "agreement to agree.") Moreover, there is no
indication that that resolution, which was adopted in March 2010, is related in any way to the
loan plaintiff made to SRB Convention in November 2011, almost two (2) years later.
24
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inapposite. In that case, the Town claimed, in relevant part, that the agreement at issue between
the parties "although apparently signed by John Vendito [sic], Supervisor," was not enforceable;
and submitted on its motion to dismiss, inter a/fa, an affidavit from Venditto indicating that he
did not recall signing the agreement and that it was his understanding that the document was not
authorized by a Town Board Resolution. (Plf. Opp., Ex. A at 7). In opposition to the Town's
motion to dismiss, the plaintiff claimed, in relevant part, "that the tepid affidavit[] of Venditto ..
. [was] insufficient to overcome the presumption of validity of [his] notarized signature[] on the
document[.]" (Id.) Thus, in that case, unlike this one, there appeared to be a valid and binding
contract on the face of the pleadings and the agreement at issue sufficient to state a cause of
action against the Town for breach of contract. However, in this case, it is clear from the face of
the pleadings and the documents attached thereto, and without resorting to any extrinsic
evidence, that the SACA was never signed or executed by the Town Supervisor, nor ratified by
the Town Board. 9 Accordingly, the branch of defendant's motion seeking dismissal of plaintiffs
breach of contract claims against it pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure is granted and plaintiff.s breach of contract claims in the amended complaint (first and
second causes of action) are dismissed in their entirety with prejudice for failure to state a claim
9
Since "a plaintiff cannot amend his complaint by asserting new facts or theories for the first
time in opposition to a motion to dismiss[,]" Peacock v. Suffolk Bus Corp., 100 F. Supp. 3d 225,
231 (E.D.N. Y. 2015) (quotations, alterations and citation omitted); accord Guo v. IBM 401 (k)
Plus Plan, 95 F. Supp. 3d 512, 526-27 (S.D.N.Y. 2015), the Court has not considered plaintiffs
contentions that "even if there was no town board resolution, [it] would still be entitled to pursue
its breach claim on a theory of ratification," which is a question of fact. (Plf. Opp. at 11 ).
Plaintiff does not assert such a claim in the amended complaint; nor are there any factual
allegations from which such a claim may reasonably be inferred. See generally Seif v. City of
long Beach, 286 N.Y. 382, 386-87, 36 N.E.2d 630 (N.Y. 1941).
25
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for relief. 10
C. Unjust Enrichment Claim
"Where the Legislature provides that valid contracts may be made only by specified
officers or boards and in specified manner, no implied contract to pay for benefits furnished by a
person under an agreement which is invalid because it fails to comply with statutory restrictions
and inhibitions can create an obligation or liability of the [municipality] .... The creation of an
obligation against the town, by way of contract, cannot be founded upon omission of action by
the town officials, but must be the result of an affirmative determination to create the obligation
in the form and manner provided by statute." New York Tel. Co. v. Town o/N. Hempstead, 41
N.Y.2d 691, 696, 395 N.Y.S.2d 143, 363 N.E.2d 694 (N.Y. 1977) (quotations and citations
omitted). "[E]quitable powers of the courts may not be invoked to sanction disregard of statutory
safeguards and restrictions." Seif, 286 N.Y. at 387-88, 36 N.E.2d 630. Accordingly, "(a]s a
general rule, a claim against a municipality in quantum menlit will not lie where the original
contract is void as contrary to statute or ultra vires[.]" Vrooman v. Village of Middleville, 91
A.D.2d 833,834,458 N.Y.S.2d 424 (N.Y. App. Div. 1982), Iv. denied, 58 N.Y.2d 610,462
N.Y.S.2d 1028, 449 N.E.2d 427 (N.Y. 1983).
However, a limited exception to that general rule exists, see Mans Constr., 114 A.D.3d at
912, 980 N.Y.S.2d 822; Mid-Atlantic Perfi,sion Assocs., Inc. v. Westchester County Health Care
Corp., 54 A.D.3d 831, 832-33, 864 N.Y.S.2d 100 (N.Y. App. Div. 2008), insofar as "[a] plaintiff
0
' In light of this determination, it is unnecessary to consider defendant's remaining contention
seeking dismissal of plaintiffs breach of contract claims on the basis that the SACA is
unenforceable because it violates section 1 of Article Vill of the New York State Constitution.
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is entitled to recover from a municipality where ... he has entered into a contract in good faith,
the municipality possesses the authority to enter into the contract, the contract is not violative of
public policy and the circumstances indicate that if plaintiff is not compensated, the municipality
would be unjustly enriched[.]" Vrooman, 91 A.D.2d at 834,458 N.Y.S.2d 424. "The policy
underlying the rule against holding municipalities liable on an implied contract theory is that of
safeguarding the taxpayers' interest against extravagance and collusion on the part of public
officials by requiring municipalities to abide by statutory restrictions on their contractual
authority[.]" Id. (quotations and citation omitted).
The limited exception to the general rule does not apply in this case. Neither plaintiff nor
SRB Convention were "providing services at the behest of a higher State authority," as in
Vrooman. 11 Rather, plaintiff and SRB Convention were "always in an arms-length relationship
with the [Town]." Housing Works v. Turner, 179 F. Supp. 2d 177,214 (S.D.N.Y. 2001), ajf'd on
other grounds, 56 F. App'x 530 (2d Cir. Jan. 3, 2003). Furthermore, unlike the case Aniero
11
In Vrooman, after the New York State Department of Health had directed the defendant-
village ''to cease and abate the discharge of sewage and other wastes into the waters of the State
and to submit plans for sewage treatment facilities[,]" the Village entered into an agreement with
the plaintiff"to provide engineering services in the design and planning of the sewage treatment
facility." Vrooman, 91 A.D.2d at 833-34, 458 N.Y.S.2d 424. Although the plaintiff performed
the design and planning services and obtained State approval of its plans, the Village failed to
pay its verified claim. At trial, "the Village stipulated that the amount stated in the complaint
was the proper valuation for the services rendered [by the plaintiff]." Id. at 834. The Supreme
Court of the State of New York, Appellate Division, Fourth Judicial Department, found that the
policy underlying the general rule against holding municipalities liable on an implied contract or
unjust enrichment theory would not be contravened in that case because "[t]he Village was
ordered by the State to develop a sewage treatment system and the services provided by [the]
plaintiff were essential to effectuate that directive[;] [t]here [was] no dispute as to the[] value [of
those services] and no harm to the taxpayers[;] and "[t]o absolve the municipality from liability,
particularly when it ha[d] been significantly benefited [sic] by [the] plaintiffs services, would
encourage disregard of the statutory safeguards by municipal officials." Id.
27
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Concrete Co., Inc. v. New York City Constr. Auth., No. 94-cv:3506, 2000 WL 863208 (S.D.N.Y.
June 27, 2000), upon which plaintiff relies, "it cannot be said that [either plaintiff or SRB
Convention] was merely stepping in mid-project to complete a contract that had already been
approved and registered by another party." 12 Housing Works, 179 F. Supp. 2d at 214. Under the
12
In Aniero, the plaintiff was the contractor selected by the Aetna Casualty and Surety Company
("Aetna") to complete construction of a project to renovate a public school in the Bronx upon the
mid-project default of the original contractor, whose performance Aetna secured under a
performance and payment bond. Aniero, 2000 WL 863208, at * 1. After nine (9) months on the
project, the plaintiff ceased its work and commenced an action asserting, inter alia, a proposed
claim in quantum meruit against the New York City School Construction Authority ("the
NYCSCA"), the public benefit corporation that developed the project, to recover the
uncompensated value of its work. Id. The NYCSCA challenged the plaintiffs proposed
quantum meruit claim against it on the basis that since the plaintiffs work on the project was not
furnished pursuant to a contract awarded under the competitive bidding process required by that
New York Public Authorities Law ("PAL") 1734-1735, it would violate public policy to hold
it liable under a quasi-contract theory. Id. at 12. The district court found that "neither the
governing PAL provisions nor any of the cases cited by [NYC]SCA can be read to bar quantum
meruit recovery for services rendered ... by a completion contractor following the original
contractor's mid-project breach of a properly awarded contract, particularly absent any
suggestion that the procurement of either contractor's services involved dishonesty or improper
behavior." Id. The district court found that the circumstances for applying the exception to the
general rule that a plaintiff may not recover in equity or quasi-contract when a public contract is
deemed void because it was entered into in violation of applicable statutory restrictions
"abound[ed]" in that case because the NYCSCA complied with the applicable competitive
bidding statutes in awarding the only contract it executed with respect to the project, i.e.; the
contract with the original contractor; that after the original contractor defaulted, the NYCSCA
invoked the terms of the performance bond that it had required the original contractor to obtain to
request that Aetna complete performance of the contract; that Aetna engaged the plaintiff as a
completion contractor pursuant to the performanc.e bond; and that "[n]othing in the record or the
allegations suggest[ed] that the procurement or the performance of [the plaintiffs] services
implicate[d] the integrity of the process of awarding public construction contracts." Id. at 14-16.
Moreover, the court found that NYCSCA's "compliance with the applicable regulations in
awarding the [contract with the original contractor] satisfie[d] the public policy underlying the
regulations and sanction[ed] payments made by [NYC]SCA to a completion contractor after the
initial contractor's default," id. at 14; and that allowing the plaintiff to recover against the
NYCSCA in quantum meruit would not undermine the policy, as relevant here, "of preventing
extravagance and collusion on the part of public officials," which underlies the general rule. Id.
at 16. None of the circumstances warranting the limited exception to the general rule that the
district court found "abound[ed]" in Aniero are present in this case.
28
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circumstances of both of the cases in which the limited exception to the general rule was applied,
the court found that the quasi-contract theory asserted therein would not undermine the public
policy underlying the general rule, i.e., the protection of the Town's "inhabitants and taxpayers
against ill-considered or extravagant action." Scarborough Props., 278 N.Y. at 375-76. No such
circumstances are present in this case. Accordingly, under the circumstances of this case, "the
general rule prohibiting unjust enrichment claims against municipalities applies." Housing
Works, 179 F. Supp. 2d at 214.
Moreover, "[u]nder New York law, a plaintiff may prevail on a claim for unjust
enrichment by demonstrating (1) that the defendant benefitted; (2) at the plaintiffs expense; and
(3) that equity and good conscience require restitution." Nordwind v. Rowland, 584 F.3d 420,
434 (2d Cir. 2009) (quotations and citation omitted). "The essence of such a claim is that one
party has received money or a benefit at the expense of another[,]" Kaye v. Grossman, 202 F.3d
611,616 (2d Cir. 2000) (quotations and citation omitted), and "[t]he essential inquiry in any
action for unjust enrichment ... is whether it is against equity and good conscience to permit the
defendant to retain what is sought to be recovered[.]" Paramount Film Distrib. Corp. v. State, 30
N.Y.2d 415,421,334 N.Y.S.2d 388,285 N.E.2d 695 (N.Y. 1972); see also Regnante v.
Securities & Exch. Officials, 134 F. Supp. 3d 749, 772 (S.D.N.Y. 2015) C'[I]n order to state an
unjust enrichment claim, a plaintiff must show that the defendant actually received a benefit[,] ..
. [and the] benefit must be both 'specific' and 'direct. "' 13 (citations omitted)). "Generally, courts
13
"For the benefit to be 'direct,' the defendant must either be put in possession of the benefit, or
otherwise obtain financial relief because of the benefit; it is not enough that the funds 'indirectly'
benefit the defendant .... [A] benefit is direct when it or its functional equivalent is in the
defendant's possession to return." Buchwald v. Renco Grp., 539 B.R. 31, 49-50 (S.D.N.Y.
2015).
29
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will look to see if a benefit has been conferred on the defendant under mistake of fact or law, if
the benefit still remains with the defendant, if there has been otherwise a change of position by
the defendant, and whether the defendant's conduct was tortious or fraudulent[.]" Paramount
Film, 30 N.Y.2d at 421, 334 N.Y.S.2d 388. "[U]njust enrichment is not a catchall cause of
action to be used when others fail[] ... [and] is available only in unusual situations when, though
the defendant has not breached a contract nor committed a recognized tort, circumstances create
an equitable obligation running from the defendant to the plaintiff." Corsello v. Verizon N. Y.,
Inc., 18 N.Y.3d 777, 790, 944 N.Y.S.2d 732, 967 N.E.2d 1177 (N.Y. 2012).
The amended complaint is bereft of any factual allegations from which it may reasonably
be inferred that defendant actually received any specific and direct benefit at plaintiffs expense,
i.e., that the Town, itself, received any benefit from the loan plaintiff made to SRB Convention in
November 2011. Indeed, the amended complaint alleges only that the Town was unjustly
enriched "to the extent [plaintiffs] funds were utilized to improve and/or operate the Facilities,"
and that "equity and good conscience dictate that [the Town] should reimburse [plaintiff] for any
14
improvements to the Facilities made by SRB with [plaintiffs] funds." (Am. Compl., ,I 35 at p.
12). There is no indication that any of the proceeds of the loan plaintiff made to SRB
Convention in November 2011 were actually utilized in any way to bestow a direct benefit upon
the Town. Accordingly, the branch of defendant's motion seeking dismissal of plaintiffs unjust
enrichment claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure is granted
14
Even in its opposition to defendant's motion, plaintiff does not assert that the Town received
any direct benefit from its loan to SRB Convention. Rather, plaintiff non-committally asserts
that "any PHL funds that were utilized to improve or operate the Facilities were, by definition,
essential to its public purpose .... " (Plf. Opp. at 17) ( emphasis added).
30
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and plaintiffs unjust enrichment claim (third cause of action) is dismissed in its entirety with
prejudice for failure to state a claim for relief.
D. Fraud Claims
"To state a claim for fraud under New York law, a plaintiff must allege (1) a material
misrepresentation or omission of fact; (2) which the defendant knew to be false; (3) which the
defendant made with the intent to defraud; (4) upon which the plaintiff reasonably relied; and (5)
which caused injury to the plaintiff." Financial Guar. Ins. Co. v. Putnam Advisory Co., LLC,
783 F.3d 395,402 (2d Cir. 2015); Mandarin Trading, 16 N.Y.3d at 178, 919 N.Y.S.2d 465
("Generally, in a claim for fraudulent misrepresentation, a plaintiff must allege a
misrepresentation or a material omission of fact which was false and known to be false by
defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of
the other party on the misrepresentation or material omission, and injury[.]" (quotations and
citation omitted)); New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 318, 639 N.Y.S.2d
283, 662 N.E.2d 763 (N.Y. 1995) ("The essential elements of a cause of action for fraud are
representation of a material existing fact, falsity, scienter, deception and injury[.]" (quotations
and citation omitted)).
"To plead a claim for fraud in the inducement or fraudulent concealment, plaintiff must
allege facts to support the claim that it justifiably relied on the alleged misrepresentations." ACA
Fin. Guar. Corp. v. Goldman, Sachs & Co., 25 N.Y.3d 1043, 1044, 10 N.Y.S.3d 486, 32 N.E.3d
921 (N.Y. 2015); see also Paraco Gas Corp. v. Travelers Cas. & Sur. Co. ofAm., 51 F. Supp. 3d
379, 393 (S.D.N.Y. 2014) ("[T]o prevail on a claim of fraud, a plaintiff must show that it actually
31
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relied on the purported fraudulent statements and that its reliance was reasonable or justifiable."
(quotations and citation omitted)); Nabatkhorian v. Nabatkhorian, 127 A.D.3d 1043, 1044, 7
N.Y.S.3d 479 (N.Y. App. Div. 2015) ("An essential element of any fraud claim is that there must
be reasonable reliance, to a party's detriment, upon the representations made by the defendant
against whom the fraud claims has been asserted[.]" (quotations, alterations and citations
omitted)). "The plaintiff must show a belief in the truth of the representation and a change of
position in reliance on that belief." Nabatkhorian, 127 A.D.3d at 1044. 7 N.Y.S.3d 479.
"[I] f the facts represented are not matters peculiarly within the defendant's know ledge,
and the plaintiff has the means available to it of knowing, by the exercise of ordinary
intelligence, the truth or the real quality of the subject of the representation, the plaintiff must
make use of those means, or it will not be heard to complain that it was induced to enter into the
transaction by misrepresentations[.]" ACA Fin., 25 N.Y.3d at 1044, 10 N.Y.S.3d 486 (quotations,
alterations and citation omitted). Moreover, "(w ]here sophisticated businessmen engaged in
major transactions enjoy access to critical information but fail to take advantage of that access,
New York courts are particularly disinclined to entertain claims of justifiable reliam;e." Crigger
v. Fahnestock & Co., Inc., 443 F.3d 230, 235 (2d Cir. 2006) (quoting Gntmman Allied Indus.,
Inc. v. Rohr Indus., Inc., 748 F.2d 729, 737 (2d Cir. 1984)).
The fact that the SACA was executed by Genova, in his capacity as the then-Town
Attorney, and not by the Town Supervisor, as the Concession Agreement, FACA and Extension
Agreement had been, is readily discernible from the face of that document. Moreover, the Harris
Beach Letter, the Mei Letter and the SACA itself, all reference the Town Resolutions approving
the prior agreements relating to the SACA, yet omit any reference to a Town Resolution
32
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approving the SACA. As indicated above, "[a] party contracting with a municipality is
chargeable with knowledge of the statutes which regulate its contracting powers and is bound by
them[.]" Parsa, 64 N.Y.2d at 147, 485 N.Y.S.2d 27. "Those dealing with officers or agents of
municipal corporations must at their peril see to it that such officers or agents are acting within
their authority ... and they have no right to presume that the persons with whom they are dealing
are acting within the line of their authority[.]" City of Zanesville. Ohio v. Mohawk Data Scis.
Corp., 97 A.D.2d 64, 66,468 N.Y.S.2d 271 (N.Y. App. Div. 1983); see also Casa Wales
Housing Dev. Fund Corp. v. City of New York, 129 A.D.3d 451,451, 11 N.Y.S.3d 31 (N.Y. App.
Div. 2015), Iv. denied, 26 N.Y.3d 917, 26 N.Y.S.3d 762, 47 N.E.3d 92 (N.Y. 2016) ("[T]hose
dealing with municipal agents must ascertain the extent of the agents' authority, or else proceed
at their own risk[.]"); Walentas v. New York City Dep 't of Ports, 167 A.D.2d 211,212,561
N.Y.S.2d 718 (N.Y. App. Div. 1990), Iv. denied, 78 N.Y.2d 857,574 N.Y.S.2d 938, 580 N.E.2d
410 (N.Y. 1991) C'[I]t is solely at his peril that ... a party presumes that the persons with whom
he is dealing are acting within the scope of their authority and, since the extent of that authority is
a matter of public record, there is a conclusive presumption that he is aware of it.") "Even where
municipalities have accepted benefits, they will not be held liable under unauthorized
agreements[.]" Goldberg, 163 A.D.2d at 353, 558 N.Y.S.2d 564; see also Parsa, 64 N.Y.2d at
147 ("[T]he State's acceptance of benefits furnished under a contract made without authority
does not estop it from challenging the validity of the contract or from denying liability pursuant
to it[.]"); Seif, 286 N.Y. at 387, 36 N.E.2d 630 ("Mere acceptance of benefits by the city under a
contract made without authority does not estop a municipal corporation from challenging the
validity of the contract and from denying liability for materials furnished or services rendered
33
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under a contract not made or ratified by a board or officer acting under authority conferred by law
and in the manner prescribed by law."). "Although application of this rule results in occasional
hardship, it has been held that the loss should be ascribed to the negligence of the person who
failed to ascertain the authority vested in the public agency with whom he dealt and statutes
designed to protect the public should not be annulled for his benefit." City of Zanesville, 91
A.D.2d at 67 (quotations and citation omitted); see also Parsa, 64 N.Y.2d 143, 147,485
N.Y.S.2d 27 ("Even though a promise to pay may be spelled out from the parties' conduct, a
contract between them may not be implied to provide 'rough justice' and fasten liability on the
State when applicable statutes expressly prohibit it .... The result may seem unjust but any other
rule would completely frustrate statutes designed to protect the public from governmental
misconduct or improvidence.")
The amended complaint fails to state plausible fraud claims against the Town based upon
the alleged misrepresentations of Garry in the Harris Beach Letter, Mei in the Mei Letter and
Genova in the SACA, relating to the validity and enforceability of the SACA, because, at most,
those representations are mere "misstatement[s] of a matter of law presumed to be so well within
the knowledge of plaintiff as to prevent if from being deceived thereby." Steiner Egg Noddle Co.
v. City of New York, 63 Misc.2d 163,165,311 N.Y.S.2d 406 (N.Y. App. Term 1969). In other
words, since, inter alia, the requirements of the New York Town Law 64(6) are a matter of
public record, plaintiff is charged with knowledge of the fact that Genova, as the then-Town
Attorney, had no authority to execute the SACA, and that a valid and binding contract required
34
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Town Board approval's; and since it is clear from the face of the SACA that it did not comply
with the statutory requirements, plaintiff, which, at all times, was represented by counsel in
connection with the transactions at issue, could not have reasonably relied upon the purported
misrepresentations in the Harris Beach Letter, Mei Letter SACA. See, e.g. Merrick Gables, 691
F. Supp. 2d at 363 (dismissing fraud claim on the basis that it was not reasonable for the plaintiff
to rely upon the town's alleged representation that it would act in a manner proscribed by federal
law); Michael R. Gianatasio, PE, P.C. v. City of New York, 53 Misc.3d 757, 775 (N.Y. Sup. Ct.
2016) (dismissing the plaintiff's fraud claim because, inter alia, it "could have, and should have,
been aware of the law requiring the job to be bid-out and could not justifiably rely on [the
defendant's] invitation to work on a no-bid contract.")
Moreover, it is undisputed that Genova did not have authority to execute the SACA and
"an unauthorized act of a public official precludes an action for deceit[.]" Steiner, 63 Misc. 2d at
166; accord Brill v. Wagner, 5 Misc.2d 768, 770, 161 N.Y.S.2d 490 (N.Y. Sup. Ct. 1957); see
also Lindlots Realty Corp. v. Suffolk County, 278 N.Y. 45, 53, 15 N.E.2d 393 (N.Y. 1938)
(holding that the fact "that the plaintiff had no right to rely upon an unauthorized act of a public
official, since the authority of [that official] was a matter of record and [the] plaintiff is
conclusively presumed to have known the extent of th[at] authority[,] ... may preclude an action
for deceit, [although] it does not bar rescission."); Robinowitz v. City of White Plains, 245 A.D.
is The fact that the SACA was the only agreement of the four (4) agreements between the Town
and SRB Catering and/or SRB Convention, to be executed by the Town Attorney, and not by the
Town Supervisor; and that the Harris Beach Letter, Mei Letter and SACA all reference the
specific Town Resolutions approving the prior agreements relating to the SACA, i.e., the
Concession Agreement, the FACA and the Extension Agreement, but omit any reference to a
Town Resolution approving the SACA, is readily discernible from the face of those documents.
35
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736,738,280 N.Y.S. 105 (N.Y. App. Div. 1935), ajf'd, 269 N.Y. 670, 200 N.E. 50 (N.Y. 1936)
(granting the defendant's motion to dismiss the plaintiffs fraud claims against the city on the
basis, inter alia, that "[t]he alleged misrepresentations upon which the plaintiff [said] she relied
[were] predicated upon the doing of acts beyond scope of the authority of the officials who,
plaintiff claims, made them.") Plaintiffs conclusory allegations that Harris Beach, Mei and
Genova acted "for the benefit of, and on behalf of," the Town, (see Am. Compl., ,I,J 41 at pp. 14
and 16; ,r,i 42 at pp. 17, 18, 19 and 21; and ,I 3 7 at p. 22), in making the representations regarding
the validity and enforceability of the SACA and related documents, are insufficient to state a
plausible claim of reasonable reliance, particularly in light of the statutory limitation on the
authority of municipal employees to enter into contracts and incur financial obligations. See
Genesco Entm 't, 593 F. Supp. at 749 (construing the plaintiffs claim that it reasonably relied on
the representations of the deputy commissioner, the general counsel and the deputy general
counsel of the City to be "a claim that the negotiating parties, although without actual authority,
possessed apparent authority to enter into" the contract, but rejecting that claim on the basis that
"New York courts do not generally follow the doctrine of apparent authority in.,cases involving
municipal defendants ... [because] [u ]nlike a typical agency relationship, the authority of
municipal officers is a matter of record to which the public has ready access."); NRP Holdings
LLC v. City of Buffalo, No. l 1-cv-472S, 2017 WL 745860, at* 13 (W.D.N.Y Feb. 27, 2017),
appeal filed, No. 17-783 (2d Cir. Mar. 20, 2017) (finding that the plaintiff was not entitled to rely
on the alleged promises in the ... [l]etter [by a municipal official] ... because [that official] did
not have the authority to make unconditional promises. It is of little importance why the promise
exceeded the agent's power- whether it was an illegal promise, ... or required legislative
36
Case 2:16-cv-04013-SJF-, .. ,T Document 21 Filed 05/30/17 ~ -~e 37 of 43 PagelD #: 627
approval, ... the promise need only be outside the authority of the promisor."); cf Board of
Educ. of Plainedge Union Free Sch. Dist. v. Connecticut Gen. life Ins. Co., 309 F. Supp. 2d 416,
421 (E.D.N.Y. 2004) (holding that the principle "that apparent authority cannot bind a
municipality[,] is limited to those circumstances where a municipal employee's authority is
limited by statutes or regulations.") Accordingly, the branch of defendant's motion seeking
dismissal of plaintiffs fraud claims against it pursuant to Rule 12(b)(6) is granted and plaintiffs
fraud claims (eighth, ninth and twelfth causes of action) are dismissed in their entirety with
prejudice for failure to state a claim for relief. 16
E. Innocent and Negligent Misrepresentation Claims
"[A] claim for negligent misrepresentation requires the plaintiff to demonstrate ( 1) the
existence of a special or privity-like relationship imposing a duty on the defendant to impart
correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable
reliance on the information[.]" Mandarin Trading, 16 N.Y.3d at 180, 919 N.Y.S.2d 465
(quotations, alterations and citation omitted); see also Anschutz Corp. v. Merrill Lynch & Co.,
Inc., 690 F.3d 98, 114 (2d Cir. 2012) ("To state a claim for negligent misrepresentation under
New York law, the plaintiff must allege that (1) the defendant had a duty, as a result of a special
relationship, to give correct information; (2) the defendant made a false representation that he or
she should have known was incorrect; (3) the information supplied in the representation was
known by the defendant to be desired by the plaintiff for a serious purpose; (4) the plaintiff
16
In light of this determination, it is unnecessary to consider defendant's remaining contentions
seeking dismissal of plaintiffs fraud claims.
37
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intended to rely and act upon it; and (5) the plaintiff reasonably relied on it to his or her
detriment." (quotations and citation omitted)).
A claim for "innocent misrepresentation" is, in essence, a claim for "rescission based on
fraud[,]" in which, "unlike a cause of action in damages on the same ground, proof of scienter
and pecuniary loss is not needed." D 'Angelo v. Bob Hastings Oldsmobile, Inc., 89 A.D.2d 785,
785,453 N.Y.S.2d 503 (N.Y. App. Div. 1982), aff'd, 59 N.Y.2d 773,464 N.Y.S.2d 724,451
N.E.2d 471 (N.Y. 1983); see also Seneca Wire & Mfg. Co. v. A .. leach & Co., 247 N.Y. 1, 7-8,
159 N .E. 700 ( 1928) ("It is not necessary, in order that a contract may be rescinded for fraud or
misrepresentation, that the party making the misrepresentation should have known that it was
false. Innocent misrepresentation is sufficient, and this rule applies to actions at law based upon
rescission as well as to actions for rescission in equity.... A distinction in the nature of the proof
... does not exist between the action at law and the action in equity, but does exist between the
action in rescission and the action for damages based upon fraud and deceit. Here there must be
proof of willful and fraudulent misrepresentation, knowingly made, resulting in damage."); Jack
Kelly Partners LLC v. Zegelstein, 140. A.D.3d 79, 85, 33 N.Y.S.3d 7 (N.Y. App. Div. 2016), Iv.
dismissed, 28 N.Y.3d 1103, 45 N.Y.S.2d 364, 68 N.E.3d 92 (N.Y. 2016) ("'[F]raud sufficient to
support the rescission requires only a misrepresentation that induces a party to enter into a
contract resulting in some detriment; proof of scienter is not necessary and even an innocent
misrepresentation is sufficient for rescission[.]"); Steen v. Bump, 233 A.D.2d 583, 584, 649
N.Y.S.2d 731 (N.Y. App. Div. 1996), Iv. denied, 89 N.Y.2d 808,655 N.Y.S.2d 887,678 N.E.2d
500 (N.Y. 1997) ("When a party seeks rescission and not damages on the basis of fraud, proof of
scienter is not necessary; even an innocent misrepresentation is sufficient for rescission[.]");
38
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Dygert v. Leonard, 138 A.D.2d 793, 794, 525 N.Y.S.2d 436 (N.Y. App. Div. 1988) ("If the
element of scienter is subtracted from a cause of action for fraud, the remainder constitutes
innocent misrepresentation.... [I]nnocent misrepresentations may be sufficient to void a
contract[.]") Thus, in order to state a claim for innocent misrepresentation, that plaintiff must
allege "that (a) the defendant misrepresented material facts; (b) that th[o]se representations were
made to induce the plaintiff to enter into the ... agreement; and (c) that the plaintiff entered into
the agreement ... in justifiable reliance on the said misrepresentations[.]" Emerson lee. Mfg.
Co. v. Printed Motors, Inc., 252 N.Y.S.2d 600, 607-08 (N.Y. Sup. Ct. 1964); see also West Side
Fed. Sav. & Loan Ass 'n ofNew York City v. Hirschfeld, 101 A.D.2d 380,385,476 N.Y.S.2d 292
(N.Y. App. Div. 1984), Iv. denied, 65 N.Y.2d 605,493 N.Y.S.2d 1028, 482 N.E.2d 1230 (N.Y.
1985) (holding that in order to show innocent misrepresentation, the plaintiff must demonstrate
"the misrepresentation by the defendants of a material fact made to induce the plaintiff to enter
into the ... agreement and upon which the plaintiff justifiably relied[.]"); Albany Motor Inn &
Rest., Inc. v. Watkins, 85 A.D.2d 797,798,445 N.Y.S.2d 616 (N.Y. App. Div. 1981), Iv. denied,
56 N.Y.2d 508,453 N.Y.S.2d 1027, 439 N.E.2d 401 (N.. Y. 1982) C'All that is required to state a
cause of action for rescission of a contract based on fraud is to set forth the circumstances in
detail showing that a false material misrepresentation was made and that plaintiff relied on the
representation to his detriment.")
1. Justifiable Reliance
The amended complaint fails to state plausible claims for negligent and innocent
misrepresentation, inter alia, for the same reason plaintiffs fraud claims fail, to wit, the amended
39
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complaint is devoid of any factual allegations from which it may reasonably be inferred that
plaintiff justifiably relied upon the purported misrepresentations in the Harris Beach Letter, the
Mei Letter and the SACA relating to the validity and enforceability of the SACA. 17 See, e.g.
Granite Partners, L.P. v. Bear, Stearns & Co., Inc., 17 F. Supp. 2d 275, 291 n. 7 (S.D.N.Y.
1998) (dismissing claims for negligent and innocent misrepresentation "for lack of adequately
pleading justifiable reliance.") Accordingly, the branches of defendant's motion seeking
dismissal of plaintiffs innocent and negligent misrepresentation claims against it pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure are granted and plaintiffs negligent and
innocent misrepresentation claims (fourth through seventh, tenth and eleventh causes of action)
are dismissed in their entirety with prejudice for failure to state a claim for relief.
2. Special Relationship
Furthermore, in the commercial context, liability for negligent misrepresentations, "is
17
Moreover, since the only relief sought in amended complaint for the alleged
misrepresentations, exclusive of interest and costs, is damages, (see Am. Compl., ,i,i 43 at pp. 14
and 16; ,i 41 at 23; and "Wherefore" Clause at 26), not rescission or reformation of the SACA,
the amended complaint fails to state a plausible claim for innocent misrepresentation under New
York law. See Sheridan Drive-In, Inc. v. State, 16 A.D.2d 400,407,228 N.Y.S.2d 576 (N.Y.
App. Div. 1962) C'[W]hile innocent misrepresentations are sufficient for rescission they cannot
be the basis of a recovery of damages for fraud[.]"); Lassiter v. Rel/stab Assocs., 1 A.D.2d 672,
146 N.Y.S.2d 263 (N.Y. App. Div. 1955) (dismissing innocent misrepresentation claims on the
grounds that the complaint did not seek "relief by way ofreformation or rescission," but instead,
"attempt[ed] to plead a cause of action to recover damages caused by innocent
misrepresentations of fact," which action "does not lie.") All of the cases cited by plaintiff in
opposition to the branch of defendant's motion seeking dismissal of its innocent
misrepresentation claims are inapposite, as, inter alia, they do not involve an innocent
misrepresentation claim under New York law.
40
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imposed only on those persons who possess unique or specialized expertise, or who are in a
special position of confidence and trust with the injured party such that reliance on the negligent
misrepresentation is justified." Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473,490 (2d
Cir. 2014) (quotations, alterations and citation omitted). Since ''an arm's length borrower-lender
relationship [] does not support a cause of action for negligent misrepresentation[,] ... even ...
if the parties are familiar or friendly[,]" Greenberg, Trager & Herbst, LLP v. HSBC Bank USA,
17 N.Y.3d 565, 578, 934 N.Y.S.2d 43, 958 N.E.2d 77 (N.Y. 2011), neither does the relationship
between the lender and, in effect, the borrower's guarantor. See Fidelity Nat'/ Title Ins. Co. v.
N.Y. Land Title Agency LLC, 121 A.D.3d 401,403,994 N.Y.S.2d 76 (N.Y. App. Div. 2014)
("[A] special relationship of trust and confidence does not arise merely from an arm's-length
business transaction ...." (quotations and citation omitted)); Bank Leumi Trust Co. ofN. Y. v.
Block 3102 Corp., 180 A.D.2d 588, 589, 580 N.Y.S.2d 299 (N.Y. App. Div. 1992), lv. denied, 80
N.Y.2d 754, 587 N.Y.S.2d 906, 600 N.E.2d 633 (N.Y. 1992) ("The legal relationship between a
borrower and a bank is a contractual one of debtor and creditor and does not create a fiduciary
relationship between the bank and its borrower or its guarantors.") Since plaintiffs negligent
misrepresentation claims involve sophisticated parties, represented at all times by counsel during
the transactions at issue, that entered into an arm's length business transaction, a finding of a
special relationship is precluded. 18 See Landesbank Baden-Wurttemberg v. Goldman, Sachs &
18
Moreover, "[a]s a matter oflaw, a sophisticated plaintiff cannot establish that it entered into
an arm's length transaction in justifiable reliance on alleged misrepresentations if that plaintiff
failed to make use of the means of verification that were available to it[.]" UST Private Equity
Inv 'rs Fund, Inc. v. Salomon Smith Barney, 288 A.D.2d 87, 88, 733 N.Y.S.2d 385 (N.Y. App.
Div. 2001); accord Landesbank Baden-Wurttemberg, 821 F. Supp. 2d at 624. "The principle that
sophisticated parties have a duty to exercise ordinary diligence and conduct an independent
appraisal of the risk they are assuming, ... has particular application where ... the true nature of
41
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Co., 821 F. Supp. 2d 616,624 (S.D.N.Y.2011), ajf'd, 478 F. App'x 679 (2d Cir. Apr. 19, 2012);
Basis Pac-Rim Opportunity Fund v. TCW Asset Mgmt. Co., 124 A.D.3d 538, 539, 2 N.Y.S.3d
105 (N.Y. App. Div. 2015).
Contrary to plaintiffs contention, the case RBS Citizens, N.A. v. Thorsen, 71 A.D.3d
1108, 898 N.Y.S.2d 219 (N.Y. App. Div. 2012), does not hold that "[t]he furnishing by counsel
of an opinion establishes the existence of the 'special relationship' required in order to plead a
claim of negligent misrepresentation." (Plf. Opp. at 22). Rather, that case held: (1) that "[t]he
plaintiff alleged the existence of certain facts which, if true, would establish that the defendant
had a duty to use reasonable care to impact correct information to the plaintiff due to a special
relationship existing between the parties[,]" id. at 1109 (quotations and citation omitted), without
indicating what those "certain facts" were; and (2) that "[t]he plaintiff also alleged the existence
of certain facts which, if true, would establish" the other elements of a negligent
misrepresentation claim, i.e., that "certain 'information' the defendant imparted to the plaintiff in
an opinion letter was false, and that the plaintiff reasonably relied on that information[.]" Id.
(quotations and citation omitted)" Since the amended complaint does not allege any factual
allegations from which a special relationship between plaintiff and defendant, or the element of
justifiable reliance, may reasonably be inferred, the branch of defendant's motion seeking
the risk being assumed could have been ascertained from reviewing ... publicly available
information[.]" HSH Nordbank AG v. UBS AG, 95 A.D.3d 185,195,941 N.Y.S.2d 59 (N.Y.
App. Div. 2012) (quotations, alterations and citation omitted). As noted above, plaintiff and/or
its counsel representing it during the transactions at issue, could easily have verified the
representations in the Harris Beach Letter, Mei Letter and SACA regarding the validity and
enforceability of the SACA and related documents, as the requirements for entering into a
municipal contract are a matter of public record and the failure of the SACA to comply with
those requirements is readily ascertainable from the face of that document.
42
....... Document 80 Filed 08/28/17 Page
~
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dismissal of plaintiffs negligent misrepresentation claims pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure is granted and plaintiffs negligent misrepresentation claims are
dismissed in their entirety with prejudice for failure to state a claim for relief. 19
III. CONCLUSION
For the reasons set forth above, defendant's motion to dismiss plaintiffs claims against it
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure is granted to the extent set
forth herein and plaintiffs claims against defendant in the amended complaint are dismissed in
their entirety with prejudice for failure to state a claim for relief. The Clerk of the Court shall
enter judgment in favor of defendant and close this case.
SO ORDERED.
\s\
Sandra J. Feuerstein
United States District Judge
Dated: May 30, 20 I 7

Central Islip, New York
19
In light of this determination, it is unnecessary to consider defendant's remaining contentions
seeking dismissal of plaintiffs tort claims against it.
43
Jo;-.?u-1.:, 11 ;4C)AM;
# , ,I
June 20, 2012
MS. LINDA MILLS

Purchaser
State ofNewYork
Couaty of Nassau
Good Aftemoon Ms. &!ills,
Th2.nk you foJ: t2.king the time to meeting with me last Friday. I really appreciate all your kind
cooperation .in BID#D09-04 052-853C- Bread and Rolls.
Unfortunately due to budget miscalculatio ns, I have to .resign from this BID, since I will not
be able to p~ovide the products with the prices I offered.
I apologize for any inconvenien ce that this may have caused, however I hope you
understand that my business is still gi:owing and any 5na.acial mishap will get it out of
business - so I prefer to be honest with you and let the BID be assigned to anotb.ec business
thl\t is paz:ticipatiag in the BID process.
I hope to keep ~pancllog and growing my bakery business nod be able to do business with
you in the futw:c.
Thank you very much.
-eJ~~/0\
San Remo Bake,y . - v
943 N. Broadway-- Massapequa, NY 11758

T: (516) 541-1166-F : (516) 308-4410
www .sanremobakeryny.corn
AFFIDAVIT
JOSEPH D. MUSCARELLA, being duly sworn, deposes and states as follO\:vs:
1. My name is Joseph D. Muscarella, I reside at 131 East Drive, North Massapequa, New
York 11758. My date of birth is August 27, 1959.
2. I am a Town Councilman for the To'\ivn of Oyster Bay, Ne\V York.
3. For many years, I have been an acquaintance of Robert McDonald. Mr. McDonald was
elected as a Justice of the Supreme Court in New York on November 8, 2016. Previously, Mr.
McDonald was an attorney in private practice in Mineola, New York, and for many years \Vas
active in the Democratic Party in Nassau County, New York, and held a senior position with the
Nassau County Democratic Committee.
4. I am aware of the fact that on October 20, 2016, John Venditto, then Supervisor of the
Town of Oyster Bay, Edward Mangano, Nassau County Executive, and his wife Linda Mangano
\Vere indicted on various criminal charges in the Eastern District of New York.
5. At the time of their indictment, John Venditto's son, Michael Venditto was a Republican
running for re-election as a New York State Senator for District 8 located on Long Island, New
York.
6. Follo\ving the November 8, 2016 election, I met socially with Robert McDonald to
congratulate him on being elected to the position of Justice of the Supreme Court. This meeting
took place at Nicks Tuscan Grille located in Mineola, Ne\V York. Present were myself, Mr.
McDonald, my brother Thomas Muscarella, and a client of Mr. McDonald s'. During our
gathering, I raised the issue of the aforementioned indictment of Mr. Venditto, and Mr. and Mrs.
Mangano, and the timing of the indictment as it related to the proximity of the November 8, 2016
election.
7. In response, Mr. McDonald revealed to me his understanding of certain events leading to

the indictment. Mr. McDonald advised me of his awareness of a conversation Jay Jacobs had with
former President Bill Clinton shortly before the aforementioned October 20, 2016 indictment.
8. It is my understanding that Jay Jacobs has been the Chairman of the Nassau County
Democratic Committee since 200 I; was the former Chairman of the Ne\V York State Democratic
Committee, and is a member of the Democratic National Committee. It is also my understanding
that in 2016, Jay Jacobs hosted fundraisers in Nassau County for Presidential Candidate Hillary
Clinton, and that the Clintons have a personal relationship with Jay Jacobs, and have been to his
home in Laurel Hollow, New York.
9. Mr. McDonald explained to me that Jay Jacobs approached Bill Clinton shortly before the
election and advised him that he needed the indictment of Venditto and the Manganos to be done
and he needed it now". Mr. McDonald explained to me that Jacobs motivation in making this
demand was the fact that the New York State Senate election between Republican Michael
Venditto and Democratic candidate John Brooks had become a pivotal election in the Democratic
Party's attempt to obtain a majority in the New York State Senate, and that the indictment of John
Venditto and the Manganos' shortly before election day would have obvious negative
repercussions for Michael Venditto, and other GOP candidates.
10. When Mr. McDonald advised me of these facts, he commented that he was "offended" by
what he had learned and grateful to have been elected to a judgeship as it took him out of all of the
"political craziness" associated with party politics.
11. Notably, following the announcement of the October 20, 2016 indictment, despite his
incumbency, Michael Venditto lost the November 8, 2016 election to Democrat John Brooks by
an extremely narrow margin.
Dated: April 25, 2017
~l/ ~
JEPH D. MUSCARELLA
C.AURA M. ONEfL
l'rotary NPublic, State of New York
.. o.01 ON4878924
0 uat,t,ed in N
Commission Expiresats:c~~~~~tx, 2~
Ja
8/7/2017 Jcf,/Jacobs I Clinton Foundation
Jay Jacobs
CEO, TLC Kids Group
Jay Jacobs is the CEO of the TLC Kids Group, which owns and operates three
sleep-away camps in upstate New York and Pennsylvania, four day camps on
Long Island, NY, a day school, a management company and a charitable
foundation. During the summer, Jay works as the hands-on director of Timber
Lake Camp in New York's Catskill Mountains.
Jay is the founder of SCOPE (Summer Camp Opportunities Promote Education), a

program that sends inner city children to not-for-profit camps as a reward for
staying in school. In 2001 he founded and currently chairs Project Heal the
Children, an American Camp Association program that provides free summer
camp experiences to the children of victims of the 9/11 tragedy.
Since 2001, Jay has served as the Nassau County Democratic Chairman and
served from 2009 to 2012 as the New York State Democratic Chairman. He is an
At-Large Member of the Democratic National Committee and serves on its
Credentials and Finance Committees.
Jay grew up in Forest Hills, Queens, NY, and graduated with a BA degree from
SUNY Oneonta and with a JD from Northwestern University Law School. Jay
currently resides in Laurel Hollow, NY with his wife Mindy. They have two
daughters, Jessica and Jackie.
https://www.clintonfoundation.org/blog/authors~<fo/"jacobs 1/5
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General Electric
Aileen Getty and the Aileen Getty Foundation
Ariadne Getty
GIZ, Deutsche Gesellschaft fur Internationale Zusammenarbeit ** *

Vinod Gupta
HP Inc. [HP]/\
HSBC Holdings /\
Hult International Business School /\ *

Humana Inc.
ICAP SeNices North America
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~ 240 of 255 PageID #: 1881
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lnversora Carso, SA De CV. [lnmobiliaria Carso, SA De CV.]

Jay S. Jacobs and The Timber Lake Foundation
Sanela D. Jenkins
Robert L. Johnson
Walid Juffali
Dave Katragadda
Kessler Family Foundation
Michael and Jena King
Kresge Foundation
Laureate International Universities "
Jonathan and Jeannie Lavine, Trustees of the Crimson Lion Foundation
Leslois Shaw Foundation
Lukas Lundin
MAC Al OS Fund
Masimo Foundation
Microsoft
Lakshmi N. Mittal
Monsanto Company"
James R. Murdoch
Newsmax Media, Inc.
NRG Energy, Inc."
OAS SA"
Open Society Institute
Sybil Robson Orr and Matthew Orr
Jonathan M. Orszag
Peter G. Peterson Foundation
Pfizer Inc
PGA Tour, Inc.
Presidential Inaugural Committee
Princess Diana Memorial Fund
Procter & Gamble " *
Stewart Rahr
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Paul D. Reynolds
Rilin Enterprises
Robertson Foundation A
Sacks Family Foundation

Salida Capital Foundation
Donald L. Saunders
Joachim Schoss
"Indicates contributions exclusively for CGI activities such as memberships, sponsorships, and conference fees.
* Indicates a contribution was made by this donor in the first quarter of 2017.
** Indicates government grants.
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~ict of tbe ~ttornep ~eneral

lasbington, m.ec. 20530
March 9, 2012
TO: ALL DEPARTMENT EMPLOYEES
FROM: ~ ATTORNEY GENERAL

RE: ~LECTION YEAR SENSITIVITIES
Department of Justice employees are entrusted with the authority to enforce the laws of
the United States and with the responsibility to do so in a neutral and impartial manner. This is
particularly important in an election year. Now that the 2012 election season is upon us, and as
was done during the last election cycle in 2008, I am issuing this memorandum to remind you of
the Department's existing policies with respect to political activities.
I. INVESTIGATION AND PROSECUTION OF ELECTION CRIMES
The Department of Justice has a strong interest in the prosecution of election-related

crimes, such as those involving federal and state campaign finance laws, federal patronage laws,
and corruption of the election process. As Department employees, however, we must be
particularly sensitive to safeguarding the Department's reputation for fairness, neutrality, and
nonpartisanship.
Simply put, politics must play no role in the decisions of federal investigators or
prosecutors regarding any investigations or criminal charges. Law enforcement officers and
prosecutors may never select the timing of investigative steps or criminal charges for the purpose
of affecting any election, or for the purpose of giving an advantage or disadvantage to any
candidate or political party. Such a purpose is inconsistent with the Department's mission and
with the Principles of Federal Prosecution.
If you are faced with a question regarding the timing of charges or overt investigative
steps near the time of a primary or general election, please contact the Public Integrity Section of
the Criminal Division for further guidance. Please remember also that consultation with the
Public Integrity Section of the Criminal Division is required at various stages of all criminal
matters that focus on violations of federal and state campaign-finance law, federal patronage
crimes, and corruption of the election process. More detailed guidance is available in
sections 1-4 and 9-85 of the United States Attorneys' Manual, which can be accessed on line at
http://www.usdoi.gov/usao/eousa/foia reading roorn/usam/.
D. HATCH ACT
As you are aware, the Hatch Act generally prohibits Department employees from
engaging in partisan political activity while on duty, in a federal facility, or using federal
property. Please note that this prohibition includes using the Internet at work for any political
activities. The Act also _prohibits us from using our authority for the purpose of affecting election
results; soliciting (or discouraging) political participation; soliciting, accepting, or receiving
political contributions; and generally from running as a candidate in a partisan election.
In addition to restrictions on what Department employees may and may not do while on
duty, while using government property, and in off.duty activities, certain employees are further
restricted from engaging in certain political activity even while not on duty. The degree to which
an employee is restricted in his or her off-duty activities depends on his or her position, i.e.,
career, further restricted, or non-career appointee. Further restricted employees are members of
the career SES, administrative law judges, employees of the Criminal Division, National Security
Division, the Federal Bureau of Investigation, Criminal Investigators and Explosives
Enforcement Officers of the Bureau of Alcohol, Tobacco and Firearms, and noncareer appointees
in the Department. If you are unclear on these restrictions or the classification of your position,
please consult with your component's designated ethics official about the limits of permissible
activity prior to engaging in any political activity. You can also visit the Justice Management
Division's Ethics page at www.usdoj.gov/jmd/ethics/politic.html for more detailed information,
which includes the most recent guidance issued by the Deputy Attorney General on
December 17, 2011.
It is critical that each of us complies with the Hatch Act and the principles set out in this
memorandum to ensure that the public retains its confidence that we are adhering to our
responsibility to administer justice in a neutral manner. The Department's reputation for fairness
and impartiality depends upon it.
Page 2 of2
AH-STAlF. L[(;.4L l!,'lC\-:'"n-0~1O ([Ill HECYCLi:0
8/3/2017 The Ma)OI' b. .. .rte Restaurateur: How de BlasioSought Helpfrr an Early ... _,ior- The NewYorkTimes
https://nyti.ms/2tCMoCB
The Mayor and the

Restaurateur: How de Blasio
Sought Help for an Early Donor
Federal investigators, while declining to prosecute, still questioned
City
Hall's conduct. Was the administration doing favors for
contributors?
By WILLIAM NEUMAN and WILLIAM K. RASHBAUM JULY 24, 2017
Less than six months after Bill de Blasio became mayor of New York City, a
campaign donor buttonholed him at an event in Manhattan. The donor,
Harendra Singh, one of the earliest contributors to his mayoral campaign,
ran a restaurant on city property and was having problems with the lease.
Could the mayor help him?
That encounter, on June 3, 2014, set the wheels of government turning

in an extraordinary way on behalf of Mr. Singh. City officials at the highest
levels became involved, ultimately drawing the interest of federal
investigators focused on what they saw as a pattern of trading favors for
campaign contributions.
At the mayor's direction, an aide sent a series of emails that night to

Stacey Cumberbatch, the commissioner of the city agency that handles leases
on city-owned real estate, saying that Mr. de Blasio wanted her to meet with
Mr. Singh. The mayor, the aide wrote, asked that Ms. Cumberbatch brief
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him on the issue before she met with Mr. Singh, who operated Water's Edge,
in Long Island City, Queens.
The mayor then took it a step further - calling Ms. Cumberbatch, her
lawyer said, while she was in a staff meeting at her agency, the Department
of Citywide Administrative Services, known as DCAS.
Mr. de Blasio said that he wanted her to meet with Mr. Singh, asserting
that the restaurateur did a lot of good for the public, according to the lawyer,
Jim Walden. The mayor told her that he was not asking her to do anything
specific, Mr. Walden said, but that he wanted her to help Mr. Singh if she
could.
Mr. de Blasio's efforts to aid Mr. Singh became a major focus of a federal
investigation into the mayor's fund-raising and a range of actions he took on
behalf of donors - an inquiry that overshadowed and hamstrung his
administration for more than a year.
ttan, Joon H. Kim, decided

SEE MY OPTIONS
Subscriber login r or any of his aides. But Mr.
duct, citing several instances
in which he or others acting on his behalf "solicited donations from
individuals who sought official favors from the city, after which the mayor
made or directed inquiries to relevant city agencies on behalf of those
donors."
Mr. Singh was arrested in September 2015 in an unrelated political

corruption case on Long Island; the charges, which include bribing a former
deputy town attorney in Oyster Bay, were filed just as the city was close to
reaching a settlement with him over the lease. He later began cooperating
with the federal prosecutors and F.B.I. agents investigating the mayor's
fund-raising.
Still, Mr. de Blasio's efforts on behalf of Mr. Singh illustrated in stark
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terms the transactional form of governing that had largely been absent
under Michael R. Bloomberg, a billionaire who eschewed campaign
donations during his 12 years as mayor.
Being a donor afforded Mr. Singh access to a mayor eager to put the city
bureaucracy at his service. Emails, city documents and interviews with the
participants show how Mr. Singh was attended to by members of Mr. de
Blasio's inner circle and other top officials. Over 15 months, meetings were
arranged, and City Hall officials were given progress reports. And when the
talks were not proceeding to Mr. Singh's liking, the city's team of negotiators
was suddenly replaced.
Although the case did not lead to corruption charges, there was still
significant collateral damage. Ms. Cumberbatch was moved to a job at NYC
Health & Hospitals last January. The city called it a transfer, but she told co-
workers that she was forced out. Ricardo Morales, a DCAS deputy
commissioner who was in charge of the negotiations with Mr. Singh, was
fired in February as part of what the city said was an agency reorganization.
A lawyer for Mr. Morales, Robert Kraus, has filed a notice of claim
against the city in advance of a wrongful-dismissal lawsuit, alleging that he
was fired in retaliation for standing up to City Hall. Mr. Morales said the
level of attention from top officials sent a clear message. "It's obvious there's
a push from City Hall to assist this guy," he said. The notice of claim was first
reported by The Daily News.
Henry Berger, the mayor's special counsel, who was assigned to monitor
the city's handling of the Singh case, said the level of attention Mr. Singh
received had nothing to do with his being a campaign contributor.
"Do you not help somebody because they're a donor?" Mr. Berger said in
an interview. "If there's a problem with the bureaucracy and you can make
the bureaucracy work, you do it, whoever asks."
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But others, including Ms. Cumberbatch, believed that Mr. de Blasio was
seeking special treatment for a campaign donor.
"The mayor and his staff put tremendous pressure on Stacey to give
Harendra Singh a sweetheart deal, a process that started with a call directly
from the mayor," her lawyer, Mr. Walden, said in a statement, calling her a
"hero" for pushing back against Mr. de Blasio's effort on behalf of Mr. Singh.
"She resisted that pressure and, as a result, City Hall seized control of
negotiations with Singh."
A Donor Seeks a Deal

Mr. de Blasio's connection to Mr. Singh goes back at least as far as 2010,
when Mr. de Blasio, who was then the public advocate, began raising money
for what was considered a long-shot bid for mayor. Mr. Singh gave the de
Blasio campaign $2,500 in December 2010 - becoming one of just 21 people
who donated that much or more that year.
The following March, Mr. Singh held a fund-raiser at Water's Edge and
collected $5,750 in contributions from other people to Mr. de Blasio. By the
time Mr. de Blasio was elected in November 2013, Mr. Singh, his wife, his
parents, his employees and other associates had given the mayor a total of
about $33,000.
Mr. Singh ran a group of restaurant and catering companies in New

York City and on Long Island, and he had operated Water's Edge since 2008.
The restaurant, on a barge in the East River that was adjacent to a city-
owned pier, leased the space from the city.
But Mr. Singh had been fighting with the city over the lease's terms,
including whether he was obligated to pay for the reconstruction of the pier.
He also disputed the results of an audit that found that he had been
underpaying rent, with arrears and late charges totaling about $1.2 million.
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And he was seeking a long-term renewal of the lease, which was to expire in
2017.
Mr. de Blasio made his first effort to help Mr. Singh in November 2011,
arranging a meeting between the restaurateur and Edna Wells Handy, the
DCAS commissioner at the time. Mr. de Blasio sat in on the meeting, which
appears on his schedule as public advocate.
But the dispute persisted, and after Mr. de Blasio became mayor, Mr.
Singh tried again - approaching him at the June 2014 event, a $1,000-per-
couple fund-raiser for a congressman, Steve Israel, where the mayor was a
featured speaker.
That night, an aide to the mayor, J avon Coney, sent an email to Ms.
Cumberbatch. "I wanted to give you a heads up that the mayor ran into
Harendra Singh this evening," he wrote. "The mayor would like you to meet
with Harendra asap since it is a time-sensitive issue that he has." He
provided Mr. Singh's phone number and email address.
Ms. Cumberbatch replied seven minutes later, promising to contact Mr.

Singh.
"One other note for this is the mayor wants a briefing from you on this
before the meeting between you and Harendra takes place," Mr. Coney wrote
back. "Thank you!"
The next day, Mr. Singh sent Mr. Coney a packet of information. Mr.
Coney forwarded it to Ms. Cumberbatch, and her staff called a meeting to
discuss it the same day.
Ms. Cumberbatch wrote to Mr. Coney to say that she would discuss Mr.
Singh's case with the deputy mayor for economic development and the head
of the city's Economic Development Corporation, which was considering
using a parcel of land adjacent to Water's Edge for a building project. An
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email sent the next week noted that the DCAS staff was in touch with Mr.
Singh's office on "almost a daily basis."
It was at about this time that Ms. Cumberbatch received a telephone

call from the mayor. Sally Renfro, Ms. Cumberbatch's chief of staff, who has
since retired, said that she remembered her boss taking the call, and
returning to express surprise.
Ms. Cumberbatch asked her staff about Mr. Singh, her lawyer, Mr.
Walden, said. One staff member told her that Mr. Singh had served on the
mayor's inaugural committee - an indication that he was an influential
donor. Ms. Cumberbatch believed that the mayor's call had put her in a
potentially compromising position, and Mr. Walden said that she told her
staff that she was going to handle his case "by the book."
She put Mr. Morales, who started working at DCAS in mid-June, in

charge of the Singh negotiations. She also told him about the call from the
mayor.
Mr. Morales, who received the city's Ethics in Government Award in

2009 for work as the Housing Authority's general counsel, said that Mr.
Singh brought up his ties to Mr. de Blasio at their first meeting.
"He said, 'I'm an important donor to the mayor,' and it would be very
good if he could get a deal done,"' Mr. Morales said. "I said, 'Let's keep him
out of it and do what's best for the city.' He made it clear that he was a friend
to the mayor and a contributor and that the mayor had done events at the
restaurant."
Squabbles and Lawsuits

Mr. Morales and his staff worked to seek a deal with Mr. Singh, but
tensions grew. Mr. Singh agreed to a plan to pay a reduced rent over several
months, but then fell behind on those payments, according to the emails and
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other documents. The city sued Mr. Singh over the unpaid rent. And Mr.
Singh filed a lawsuit against the city claiming that he was not liable for the
pier repairs.
Mr. Singh complained to City Hall, and he accused Mr. Morales of using
threatening language- a charge that Mr. Morales denied. Mr. Berger, the
mayor's special counsel, passed the complaints on to Ms. Cumberbatch.
"I said, 'Negotiate, but be civil,"' Mr. Berger recalled.
Apparently frustrated by the pace of negotiations, Mr. Singh hired Neal

Kwatra, a lobbyist and political consultant with ties to Mr. de Blasio.
Mr. Kwatra later did work for a nonprofit group, United for Affordable
NYC, created by Mr. de Blasio to support his housing initiatives. Mr.
Kwatra's parents gave large donations to the de Blasio campaign, and his
mother, Pam Kwatra, arranged for $10,225 in donations from other people.
In July 2015, Mr. de Blasio appointed her to the board of the Economic
Development Corporation.
Mr. Kwatra began talking and emailing directly with Mr. Berger. On
March 24, 2015, Mr. Kwatra and Mr. Singh met with Mr. Morales and his
team.
"Let me know how the meeting went today," Mr. Berger wrote in an
email to Ms. Cumberbatch. "I'm sure I will get a version from Neal before
the day is over."
In the following weeks, Mr. Berger and Ms. Cumberbatch exchanged a

series of emails, some of which also included Dominic Williams, the chief of
staff of the first deputy mayor, showing that the case was being watched by
others at the highest levels of city government.
Mr. Berger said that he did not recall speaking again with the mayor
about Mr. Singh after the initial request to monitor the case. "He said, 'Take
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a look at this and make sure we're not doing anything wrong,"' Mr. Berger
said.
The next meeting with Mr. Singh and Mr. Kwatra took place on July 17,
when Mr. Morales's team was to offer the restaurateur new terms for the pier
reconstruction.
An email sent by Ms. Cumberbatch to Mr. Berger and Mr. Williams

shows that the pier project was expected to cost $8.6 million, most of which
would be paid by the city. Under the lease, Mr. Singh would be responsible
for $3.1 million, but the city was offering to reduce his portion to $2 million
in order to reach a settlement.
Just before the meeting, at the DCAS offices in the Municipal Building,
Mr. Morales received a call from Ms. Cumberbatch.
"She said she got a call from City Hall and their desire was that the
meeting go well," Mr. Morales said.
At the meeting, in a wood-paneled conference room overlooking City

Hall from the 20th floor, Mr. Morales described the new offer. Mr. Kwatra
reacted in anger. "Kwatra looks at me, jumps up and says: 'This is not good. I
guess you didn't get the memo from City Hall,"' Mr. Morales recalled.
Mr. Kwatra and Mr. Singh walked out of the room. The meeting had
lasted just minutes. "Everybody in the room's jaws dropped," Mr. Morales
said.
Ms. Cumberbatch, who was not in the meeting, emailed Mr. Berger:
"Singh and reps walked out of mtg upset."
More Talks, and an Arrest

Soon afterward, Mr. Morales and his staff were taken out of the
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negotiations, and the talks were moved from the DCAS office to City Hall,
where they were put in the hands of the mayor's top political aide, Emma
Wolfe, the director of intergovernmental affairs. Ms. Cumberbatch - who
had not previously been directly involved in the negotiations - also took
part, along with her agency's general counsel.
The first negotiating session at City Hall occurred on July 30. A day
earlier, Ms. Cumberbatch sent Ms. Wolfe an email summarizing the case.
She included a note of caution: "Just a reminder, we stand as the City's
fiduciary and as such we have to pursue the City's best interest."
By mid-August, a proposed settlement had been drafted, including a

further reduction of Mr. Singh's portion of the pier repairs, to $1.5 million.
But Mr. Singh was having difficulty raising money, and in a Sept. 9
email, Ms. Cumberbatch worried about his "overall financial health." She
added: "Looking forward to wrapping this up!"
She did not know it but Mr. Singh had been arrested that morning in
the Long Island corruption case.
Ms. Wolfe wrote to Ms. Cumberbatch several days later. "Thank you for
all your efforts with H. Singh," she said. "Case closed, and again I'm sorry!"
After federal prosecutors completed their investigation without filing

charges, Mr. de Blasio defended his practice of asking city officials to
respond to the concerns of campaign donors.
"I think it is normal for an elected official to receive concerns from

people and pass them along for an agency to assess," he said. "That's how we
have done things. That's how we will continue to do things."
Eric F. Phillips, Mr. de Blasio's spokesman, refused to say whether the

mayor had further contact with Mr. Singh about his problems with DCAS
after the June 2014 encounter or whether he discussed the matter with Mr.
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Times
Kwatra. Mr. Phillips also refused to say what Mr. de Blasio's role was in the
decision to involve Ms. Wolfe in the negotiations.
"It's the job of city employees to help constituents navigate proble ms

they're having with agencies and city government,'' Mr. Phillips said in an
email. "Whether it's someone who calls 311 or someone who talks to a
commissioner at a town hall, or to the mayor at an event or on the subway,
we want to help people and businesses find solutions to their issues. New
Yorkers who donate to political campa igns should n't be barred from
receiving that assistance."
Mr. Berger, in an interview, said that City Hall had not sought
prefere ntial treatm ent for Mr. Singh.
"My conversation with Stacey was explicit," Mr. Berger said, referring to
Ms. Cumbe rbatch . "There are two concerns: get the money he owes us and
make sure the place doesn' t get empty." He said that it was in the city's
interest to keep Water' s Edge running, so that the city could contin ue to
receive revenue.
The restau rant closed after the arrest of Mr. Singh, who is still awaiting
trial in the corrup tion case. Last month , a State Suprem e Court judge in
Queens render ed a judgm ent agains t Mr. Singh's compa ny for $3.1 million in
unpaid rent and $3.4 million for costs related to the pier renovation. It was
not clear whethe r the city would be able to collect.
A wrsion of this article appears in print on July 24, 2017, on Page A1 of the New York edition
with
the headline: Donor Sought Mayor's Help, Then City Hall Went to Work.
2017 The New York limes Company
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10/10
Case 2:16-cr-00540-JMA-SIL Document 80-1 Filed 08/28/17 Page 1 of 59 PageID #: 1897
FILED
IN CLERK'S OFFICE
U.S. DISTRICT COURT E.D.N.Y.
UNITED STATES DISTRICT COURT * AUG 28 2017. *

X LONG ISLAND OFFICE
-against- Docket No. CR 16-540
EDWARD MANGANO
LINDA MANGANO and
JOHN VENDITTO,
Defendants.
---------------------X
MEMORANDUM OF LAW IN SUPPORT OF

EDWARD MANGANO'S OMNIBUS MOTION FOR RELIEF

(516) 222-1099
On the Brief Matthew W. Brissenden, Esq.

TABLE OF CONTENTS
PRELIMINARY STATEMENT........................................................................................... 1
STATEMENT OF FACTS .................................................................................................... 3
ARGUMENT ........................................................................................................................ 15
I. Counts 1, 2 and 3 of the Indictment are Duplicitous ................................................. 15
II. Motion to Dismiss Counts 1 and 2 Insofar as They Charge Edward

Mangano In Connection with Transactions Before the Town of Oyster Bay........... 18
A. The Indictment Fails to Allege that Edward Mangano was an

Agent of the Town of Oyster Bay for Purposes of 18 U.S.C. 666 ............. .19
B. The 2010 Oyster Bay Concession Amendment is Outside the

Statute of Limitations for Purposes of 18 U.S.C. 666 ................................ 23
Ill Counts 3 and 4 Should be Dismissed to the Extent that they

Charge Mr. Mangano With Depriving the Town of
Oyster Bay of its Right to Honest Services, Because
No Fiduciary Relationship Exists Between Mr. Mangano and the Town................. 26
IV. This Court Should Hold That a Public Officer Cannot "Pressure or Advise"
Another Public Official Whom He Does Not Direct, Supervise or Control.. ............ 29
V. The Government Should Be Precluded from Proceeding on a Legal

Theory that the Ultra Vires 2011/2012 Town of Oyster Bay Amendments
Constituted "Official Acts" Under McDonnell v. United States ...... ~ ........................ 34
VI. Motion for Disclosure or Review of the Grand Jwy Minutes ................................... 36
VII. The Court Should Sever the Trials of Messrs. Mangano and Venditto ..................... 38
A. Misjoinder Under FRCP Rule 8(b) ................................................................ 38
B. Antagonistic Defenses................................................................................... 42
VIII. The Court Should Order Dismissal of the

Indictment or Discovery Regarding Selective Prosecution....................................... .44
A. The Affidavit of Joseph Muscarella

Provides Evidence of Selective Prosecution .................................................. .46
B. The Non-Prosecution of Mayor Bill de Blasio Provides Evidence

That Similarly Situated Persons Have Been Treated Differently.................. 48
C. The Court Should Dismiss Indictment or Order Discovery........................... 50
IX. Motion for Bill of Particulars ..................................................................................... 52
X. The Government Should Be Compelled to

Produce All Brady Material In Its Possession........................................................... 55
CONCLUSION ...................................................................................................................... 56
PRELIMINARY STATEMENT
Over the course of nearly two years, the Government investigated Harendra Singh's
dealings with both Nassau County and the Town of Oyster Bay, and allegations that he received
favorable contracts from these two, distinct governmental entities by providing things of value to
their respective political leaders - Nassau County Executive Edward Mangano and Oyster Bay
Supervisor John Venditto.
The Government's effort to bring charges, however, was hampered by a lack of
symmetry in the evidence. Specifically, while it was undisputed that Mangano's wife had earned
a publicly disclosed salary while working for Singh, the evidence that Mr. Mangano had sought
to reward Singh by providing him with Nassau County contracts was both weak and problematic.
Indeed, it appears that out of thousands of contracts awarded by Nassau County during the entire
period of Mr. Mangano's eight year tenure, only a single emergency 16 day "purchase order"
actually went to a Singh entity. This emergency order by the Office of Emergency Management
requisitioned a Singh catering facility to provide meals to Hurricane Sandy relief workers in
2012, and the funds used for the order were reimbursed by FEMA.
By way of contrast, prosecutors faced the opposite problem with John Venditto. Here,
the evidence showed that Mr. Singh entered in to multiple contracts with the Town of Oyster
Bay worth millions of dollars, and that at least some of those transactions were marred by blatant
self-dealing by those within the Town of Oyster Bay. In particular, Frederick Mei, the Deputy
Town Attorney of Oyster Bay, has admitted to accepting cash payments and a BMW in order to
create forged documents, which falsely purported to guarantee millions of dollars in loans to
Singh. However, the evidence of benefits flowing back to Mr. Venditto in return for such
actions is remarkably paltry.
I
Ultimately, the Government has sought to solve this evidentiary problem by drafting an
indictment which intentionally conflates the alleged conduct of Messrs. Venditto and Mangano,
and which blurs the lines between their respective responsibilities. Thus, instead of charging
separate conspiracies to defraud Nassau County and the Town of Oyster Bay, the Government
has instead charged the Defendants together in a single, unified plan to simultaneously defraud
both Nassau County and also the Town of Oyster Bay. Pursuant the Government's novel
theory, Edward Mangano - the Nassau County Executive - is criminally liable for John
Venditto's actions in awarding Oyster Bay concession agreements to Singh. In this manner, the
Government seeks to construct a quid pro quo where none actually exists.
The Government's theory of prosecution is fundamentally flawed to the extent that it
seeks to charge Edward Mangano in connection with contracts and amendments awarded to
Harendra Singh by the Town of Oyster Bay. In particular, and as set forth in greater detail below,
Mr. Mangano cannot be criminally liable for such conduct under 18 U.S.C. 666, because he is
not "an agent" of "such government" as required by that statute. Likewise, Mr. Mangano does
not have a fiduciary relationship with the Town, as would be necessary to establish Honest
Services Wire Fraud. Nor does his alleged conduct with respect to the Town rise to the level of
an "official act" under the Supreme Court's recent formulation in McDonnell v. United States,
136 S. Ct. 2355 (2016).
Accordingly, by and through the instant motion, Edward Mangano is seeking an order
granting the following relief: (1) dismissing duplicative counts of the Indictment; (2) dismissing
the Federal Program Bribery counts, to the extent that they charge Mr. Mangano in connection
with transactions in the Town of Oyster Bay; (3) dismissing the Honest Services Wire Fraud
counts, to the extent that they charge Mr. Mangano with depriving the Town of Oyster Bay of its
2

right to honest services; (4) dismissing Honest Services and Hobbs Act Extortion Counts, for
their failure to adequately allege that Mr. Mangano performed "an official act" within the Town
of Oyster Bay; (5) precluding the Government from proceeding under a theory that ultra vires
actions undertaken by Frederick Mei constituted "official acts" within the meaning of
McDonnell; (6) ordering the partial disclosure of grand jury minutes; (7) severing the trials of
Messrs. Mangano and Venditto; (8) dismissing the Indictment, or ordering discovery, based
upon evidence of selective prosecution; (9) compelling the Government to produce a bill of
particulars; and (10) compelling the Government to produce Brady material.
STATEMENT OF FACTS
I. FACTUAL BACKGROUND
A. Edward Mangano's Election and

Preexisting Relationship with Harendra Singh
In the early 1990's the Manganos met Harendra Singh through their involvement in
various community volunteer events. Thereafter, from roughly 2000 through 2009, Edward
Mangano was employed as counsel at the law firm of Rivkin Radler. In that capacity, he
represented Harendra Singh, who was at the time, a successful and well-respected local
businessman, in connection with various commercial matters unrelated to either Nassau County
or the Town of Oyster Bay. Over the years, Mr. Mangano and his wife, Linda, developed a
personal friendship with Mr. Singh and his family. Indeed, since 1990 - twenty years before Mr.
Mangano was ever elected County Executive - the Mangano family and the Singh family
regularly interacted and socialized together.
In 2009, Mr. Mangano, a relative political unknown, ran for Nassau County Executive
against Thomas Suozzi, the well-established incumbent. His narrow upset victory in November
of 2009 came as a surprise to nearly all.
3
In the wake of his victory, Mr. Mangano resigned from his position at Rivkin Radler, and
as a Nassau County Legislator, where he had been collectively earning approximately $250,000
a year. Mr. Mangano and his wife were well aware that his new position would entail a
significant pay-cut; at the time, the Nassau County Executive was paid approximately $170,000
per year. As a result, Linda Mangano began searching for employment in order to supplement
the family's income.
When Harendra Singh- the Mangano's close family friend - learned that Mrs. Mangano
was searching for work, he offered her a position. Throughout, Mr. Mangano fully disclosed his
wife's income and employment with Singh on all required County Financial Disclosure Forms.
B. Harendra Singh's Transactions with the Town of Oyster Bay
1. History of Concession Agreements
Long before Mr. Mangano was elected as Nassau County Executive, Harendra Singh was
doing business with the Town of Oyster Bay. Indeed, a recent civil complaint filed by the Town
of Oyster Bay lays out this history in detail. See Civil Complaint, Town of Oyster Bay v. Singh,
et al., Index No. 606132/2017 (Nassau Co. Sup. Ct), attached as Exhibit A to the accompanying
Affidavit of Kevin J. Keating (hereinafter the "Keating Aff.").
In 2000, Mr. Singh's catering business was awarded a concession contract to operate a
struggling restaurant called Woodlands, located at the Town of Oyster Bay Golf Course in
Syosset. And in 2005, the Town of Oyster Bay awarded Singh a second concession to run the
dining facilities at ToBay Beach. Over the years - and long before Mr. Mangano was elected to
County Executive - the Town of Oyster Bay repeatedly granted Singh sought-after amendments
to these agreements, modifications favorable to Singh as they extended the duration of his
concession rights. Indeed, with respect to the Woodlands facility, the Town executed
4
amendments favorable to Singh in 2005, and again in 2008. Likewise, at Singh's request, the
ToBay concession was amended in 2008. Each of these favorable amendments were signed by
Town of Oyster Bay Supervisor John Venditto, and authorized by the Town of Oyster Bay
Board. In short, prior to Mr. Mangano being elected as Nassau County Executive, Town of
Oyster Bay Supervisor Venditto and the Town of Oyster Bay Board awarded two concession
agreements and three favorable amendments of the agreements to Singh. Id. at 1'il 26-31.
2. 2010 Concession Amendments
As amended, Singh's concession agreements required him to make $3,250,000 in capital
improvements at each facility. In the wake of the 2008 recession, however, Singh struggled to
find the requisite financing to engage in the required improvements. Given the Town's vested
interest in protecting its properties, it sought to work with Singh in order to help him to secure
the necessary funding. Indeed, in March of 2010, the Oyster Bay Town Board passed Town
Board Resolution No. 256-2010, which recognized that "due to the global credit crisis ... it has
become very difficult to secure financing", and which authorized Supervisor Venditto "to enter
into an agreement with [Singh's] bank relating to the loan, and an agreement with the
Concessionaire regarding the use of the loan proceeds at the [Town facilities], subject to the
negotiation of acceptable terms in said agreement." Id. at ~J 33, fn. 1.
Article VIII, 1 of the New York State Constitution prohibits a town from acting as a
guarantor with respect to a private loan. However, with the aid of outside counsel, the Town of
Oyster Bay was nevertheless able to devise a solution which provided at least some comfort and
protection for Singh's prospective lenders, based upon the assignment of a "termination fee" that
was payable to Singh. Specifically, the concession agreements, as drafted, provided that in the
event of termination, Singh would be entitled to a termination fee based upon the value of the
5
capital improvements that had been completed by Singh at the facilities. As of spring 2010,
Singh had already invested approximately $1.7 million in improvements at ToBay, and roughly
$2 million at Woodlands. Hence, the 2010 amendments altered the concession agreement in
order to provide that upon termination, Singh would be entitled to a termination fee of at least
$1.5 million for the ToBay concession, and $2 million for Woodlands. These fees were then
made assignable to Singh's prospective lenders, in order to provide them with some degree of
financial protection. Id. at ,r,r 34-38; see also June 2010 Amendment to ToBay Concession
Agreement, attached as Exhibit B to the Keating Aff.
However, in order to avoid the creation of an unconditional and unlawful guaranty, the
2010 concession amendment also made it clear that the decision to terminate (and pay the
attendant fee) remained entirely within the Town's discretion.
Based upon this 2010 amendment, Singh was able to secure $1.5 million in financing
from lender Madison National Bank, in order to fund improvements at ToBay. Singh was
unable, however, to secure similar funding for Woodlands, in part because he was seeking over
$2 million in financing. See Complaint at Exhibit A to Keating Aff., 11 38-41.
The June 2010 amendments described above fully complied with the New York State
Constitution. Moreover, the amendments were again executed by John Venditto, and were again
duly approved by the Oyster Bay Town Board-the two steps which are required by law in order
to form a binding contract with the Town. See N.Y. Town Law 64(6) (Town "[m]ay award
contracts for any of the purposes authorized by law and the same shall be executed by the
supervisor in the name of the town after approval by the town board.")
Thus the 2010 amendments became the fourth and fifth amendments to Singh's original
two concession agreements - all of which were signed by Supervisor John Venditto and
6
authorized by the Oyster Bay Town Board. At the time of the execution of these 2010
amendments, Edward Mangano had been the Nassau County Executive for six months, while
1
John Venditto had been the Town of Oyster Bay Supervisor for more than a decade.
3. The Rogue and Fraudulent Fred Mei Amendments
As noted above, the duly authorized 2010 amendments met with limited success. While
Mr. Singh was able to secure$ 1.5 million in financing for ToBay, he was unable to get funding
for the requisite improvements at Woodlands.
Increasingly desperate for capital, Singh enlisted the help of Frederick Mei, a long time
friend and the Deputy Oyster Bay Town Attorney, to secure a series of ultra vires, fraudulent
guarantees without the knowledge of the Town Board or others within the Town of Oyster Bay.
These fraudulent transactions are described in detail in a civil complaint recently filed by the
Town of Oyster Bay. 2 The civil complaint summarizes the scheme as follows:
Faced with ... more stringent lender demands, Singh and Mei hatched a plan: in
return for cash payments and other kickbacks from Singh, Mei would
misrepresent to potential lenders that the Town was willing to pay even larger
termination fees than had actually been approved by the Town Board; meanwhile,
Singh' s long-time outside counsel, the law firm of Harris Beach and Harris Beach
partner William Garry, would falsely hold themselves out to potential lenders as
outside counsel for the Town and provide whatever comfort was requested by
prospective lenders as if they were duly authorized to represent the Town.
Id. at ,r 43.
The discovery materials provided by the Government include FBI 302 Forms detailing
voluntary interviews conducted of Venditto prior to his indictment, wherein Mr. Venditto makes
clear that Mangano had no involvement in the decision by the Town of Oyster Bay to extend the
20 IO concession amendments to Singh, and that the Town was inclined, on its own, to provide
this lawful assistance to Singh.
2
Town of Oyster Bay v. Singh, et al., Index No. 606132/2017, Supreme Court of the State
ofNew York, County of Nassau.
7
According to the civil complaint, this scheme commenced in 2011, when Mei took the
existing Woodlands agreement (as amended in June 2010) and unilaterally altered the terms so
that the termination fee was increased from $2 million to $3.4 million. Id. at 1 52. Notably, this
figure significantly exceeded the value of the capital improvements which Singh had made at
Woodlands.
As per the civil complaint, Mr. Mei then presented the fraudulent and tampered document
to the Oyster Bay Town Attorney, representing that he simply needed counsel to "re-sign" the
2010 amendment. Id However, it is undisputed that the document was not presented to or
signed by Venditto, and was not authorized by the Board, as required by N.Y. Town Law
64(6).
Despite this, Singh and Mei were able to enlist the law firm of Harris Beach - which
represented Singh in other matters, and which was never retained by the Town of Oyster Bay for
this purpose - to issue a purported opinion letter on behalf of the Town, falsely claiming that the
2011 amendment was legally binding upon the Town. Id. at 1144-49. Based on the doctored
2011 amendment, Singh was able to obtain $3.4 million in additional financing from Madison
National Bank in May of 2011. For his part in the scheme, Frederick Mei was compensated with
cash and a free, all-expense-paid trip to India. 3 Id. at ,r 48.
Singh and Mei repeated this scheme at least two more times in late 2011 and early 2012,
creating false guarantees without the approval or knowledge of the Town Board, which
purported to unconditionally obligate the Town to pay back Mr. Singh's lenders - in the latter
cases, an entity called Phoenix Life Insurance Company ("Phoenix").
3
Mr. Mei, Harris Beach, and its principal William Garry, are named defendants in the
lawsuit brought by the Town of Oyster Bay. Notably, neither Mr. Mangano, Mr. Venditto, nor
Town Attorney Genova (who was duped by Mei into signing the 2011 amendment) were named.
8
These later amendments were, if anything, even more egregious than the initial 2011
forgery. For instance, a document forged by Mei in the fall of 2011 purported to guarantee a
loan of $7 .8 million in connection with the Woodlands concession, without even requiring that
Singh spend the funds at Woodlands. Id. at ,i,i 55-75; see also November 18, 2011 Amendment
to Woodlands Golf Course Concession Agreement, attached as Exhibit C to the Keating Aff.
Likewise, a June 2012 forgery purported to guarantee a loan of $12.2 million in connection with
the ToBay concession - again, without requiring that the borrowed funds be used at ToBay. Id.
at ,i,i 76-90; see also June 19, 2012 Amendment to the ToBay Beach Concession Agreement,
attached as Exhibit D to the Keating Aff.
Moreover, unlike the 2010 amendment drafted by the Town's legitimate outside counsel,
the 2011/2012 Phoenix amendments provided that the Town was unconditionally obligated to
pay the termination fee upon an event of default. Thus, unlike the duly authorized 2010
amendment, the rogue Fred Mei amendments purported to represent unconditional loan
guarantees, and as such, were clearly in contravention of the New York State Constitution.
In each case, the fraudulent guarantees were supported by opinion letters authored by
4
Harris Beach - which falsely held itself out as the Town's counsel. For his part in the scheme,
Mei was compensated by Singh with checks made out to cash and a BMW. Id. at ,I 89.
Again, it bears repeating that these 2011/2012 "amendments" to the Woodlands and
ToBay concession agreements were unilaterally orchestrated by Mei, without the knowledge or
ratification of the Oyster Bay Town Board. Indeed, in the July 2016 deposition of Nelson
4
Further evidence of Mangano's lack of involvement in the Town of Oyster Bay
concession agreement amendments is the fact that Singh utilized the Harris Beach law firm - a
firm he had under retainer - to issue opinion letters on behalf of the Town of Oyster Bay
endorsing the amendments. Tom Garry, Harris Beach's principal counsel, is the vice chairman
of the Nassau County Democratic Committee, and represented former County Executive Thomas
Suozzi in the recount of the 2009 election in which Mangano unseated Mr. Suozzi.
9
Correa, the senior managing director at Phoenix, Mr. Correa testified that the lender had no
interactions with anyone inside of the Town other than Fred Mei and Harris Beach. See Nelson
Correa Deposition Transcript, attached as Exhibit E to the Keating Aff., at p. 38.
Likewise, consensual recordings obtained by the Nassau County District Attorney's
Office reveal Fredrick Ippolito - Oyster Bay's Commissioner of Planning and Development -
discussing the rogue Fred Mei amendments in 2016. In those recordings, Mr. Ippolito states that
Singh had originally approached Ippolito and requested the unconditional guarantees, but had
been rebuffed. According to Ippolito, it was only then that Singh went behind the Town's back
by approaching Mei:
I'll tell you something that a lot of people don't know. You know this deal that
H5 pulled? When he paid the town attorney's deputies? Paid them money, you
know? H came into my office and asked me to do that, I said "We can't do that.
The town can't sign for you. We can't do that." He says, "Can you talk to
Mondello and John and see if they'll give me a break anyway and I said "Listen to
me, it's illegal. We can't do that." He went across the street, right across the
parking lot ... and got a hold of Freddy Mei. And he says to Freddy, "Listen, I'll
buy you a new BMW. Can you do that? And what does the guy? - "Oh, sure, of
course, no problem."
See July 14, 2016 Affidavit of Investigator Gavin Shea, attached as Exhibit F to the
Keating Aff., at p. 21.
Because the rogue and fraudulent 2011 and 2012 concession amendments created by Fred
Mei were never presented to, or ratified by, the Town Board, were not signed by Venditto, and
were unconditional guarantees, they did not have the force of law.
Indeed, in a recent opinion and order, the Honorable Sandra J. Feuerstein held that the
November 2011 amendment did not constitute a valid and binding contract capable of obligating
the Town, insofar as it was not executed by the Town in accordance with N.Y. Town Law
s As noted by Shea in his affidavit, "H" is a reference to Harendra Singh.

10
64(6). See Decision and Order, PHL Variable Insurance Company v. Town of Oyster Bay, 16-
CV-4013 (E.D.N.Y.), attached as Exhibit G to the Keating Aff., at p. 23.
Specifically, in dismissing an action brought by Phoenix to enforce the putative guarantee
against the Town, Judge Feuerstein held that: "it is clear from the face of the pleadings and
documents attached thereto, and without resort to any extrinsic evidence, that the [November,
2011 amendment] was never signed or executed by the Town Supervisor, nor ratified by the
Town Board." Id. at p. 25.
Likewise, the 2012 concession amendments, which are attached to the accompanying
Keating Affirmation at Exhibits C and D, at were neither signed by Mr. Venditto, nor approved
by the Town Board.
C. Harendra Singh 's Transactions with Nassau County
While Harendra Singh engaged in extensive and blatantly fraudulent dealings with the
Town of Oyster Bay, his dealings with Nassau County were far more limited. And, none of these
transactions bear the hallmarks of fraud associated with the rogue Fred Mei amendments.
First, in June 2012, (two and a half years after Mangano became County Executive) a
bakery operated by a Singh entity and located in Nassau County entered a sealed bid to obtain a
County contract to supply bread to the Nassau County Jail. Previously, the contract had been
awarded to an entity located in Rockland County, New York. Consistent with the Local Vendor
preference policy, the County Purchasing Department awarded half of the bid to Singh's entity
(for those contractual items where he was low bidder), and half the award to the out of County
vendor. Subsequently, however, Singh's bakery withdrew its bid, and the contract was
ultimately awarded to the out of County vendor. See June 10, 2012 letter from San Remo
Bakery, withdrawing a bid, attached as Exhibit H to the Keating Aff.
11
Thereafter, in November 2012, in the days following Hurricane Sandy, one of Mr.
Singh's catering businesses was hired on an emergency basis to provide meals, for sixteen days,
to the hundreds of emergency relief workers operating out of the Office of Emergency
Management. At the time, there was a desperate need to feed the hundreds of emergency
personnel who were working around the clock at the Hurricane Sandy relief command center
operating out of the Office of Emergency Management in Bethpage, after their original source of
food was declared unsanitary by the Department of Health. At this moment of crisis, Singh's
business, which provided off site catering, was located just down the road from the Office of
Emergency Management, and fortuitously, had electricity. The emergency procurement order
was signed by the head of the Office of Emergency Management - one of dozens which he
signed during the Hurricane Sandy relief effort. Notably, this lawful emergency procurement
order was reimbursed virtually in its entirety by FEMA. Mr. Mangano fully denies that he
exerted any pressure upon Nassau County employees to extend this otherwise lawful and
appropriate emergency procurement order.
II. THE GoVERNMENT'S INDICTMENT
Based upon the above-outlined transactions, the Government has charged Mr. Mangano
and John Venditto with a number of bribery-related offenses. In particular, the Government
alleges that Mr. Singh provided things of financial value to both Mr. Mangano and Mr. Venditto,
and that in return, he received favorable official treatment from the Town of Oyster Bay and
Nassau County. In each case, the Government alleges that Mr. Mangano used his position as
County Executive to "advise and pressure" Town of Oyster Bay and Nassau County employees
to confer such benefits upon Singh.
12
The Indictment commences with a section entitled "Introduction to All Counts."
Paragraphs 1 through 20 of this section set forth the alleged facts in support of the charges that
follow. Hence, with respect to the purported benefits conferred upon Mr. Singh by Nassau
County, the Government alleges that:
... beginning in approximately late 2011 through approximately December 2012,

Co-Conspirator #1 [Harendra Singh], through certain business entities, was
awarded lucrative contracts by Nassau County, including but not limited to certain
contracts worth hundreds of thousands of dollars to provide food services to
Nassau County agencies ("the Nassau County Contracts). Among other things,
MANGANO used his official position to advise and pressure Nassau County
officials to award the Nassau County Contracts to Co-Conspirator# 1 [Singh].
Indictment 112.
With respect to the Oyster Bay concession amendments, the Indictment is most notable
for the facts which it excludes. While the fudictment acknowledges that Mr. Venditto did not
sign the 2011/2012 amendments, it is silent as to whether such documents were presented to or
approved by the Oyster Bay Town Board. Indeed, even though Judge Feuerstein has concluded
that the later amendments were not legally binding documents, the vaguely worded Indictment
appears to be drafted in a manner which was intended to obscure this fact. Thus, the Indictment
states:
Among other things, EDWARD MANGANO used his official position to advise
and pressure John Venditto to execute the amendment to the concession
agreements between TOB and Restaurant #4 [ToBay], and the subsequent
concession amendments in 2011 and 2012 between the TOB and Restaurants #3
[Woodlands] and #4, all of which served as indirect guarantees for loans given to
Co-Conspirator #1 [Singh] and Restaurants #3 and #4. Among other things,
VENDITTO voted on Town Board resolutions related to the concession
agreements and the amendments thereto between the TOB and Restaurants #3
[Woodlands] and #4 [ToBay], signed the 2010 amendment to the concession
agreement, and had another TOB official sign, on his behalf, the 2011 and 2012
amendments to the concession agreements, all of which served as indirect
guarantees for loans given to Co-Conspirator #1 and Restaurants #3 and #4.
13
Indictment 'if 11.
Following the introductory section, the Indictment sets forth the formal charges, which
include six bribery-related counts, and seven counts relating to obstruction or false statements.
Specifically, Counts 1 and 2 of the Indictment charge both Mr. Mangano and Mr.
Venditto with a conspiracy to commit Federal Program Bribery (18 U.S.C. 666[a][l][B]) and a
substantive violation of that statute. Both the conspiracy and the substantive count appear to
encompass each and every transaction alleged in the Indictment - i.e., both the Oyster Bay and
the Nassau County transactions.
Count 3 of the Indictment charges both Mr. Mangano and Mr. Venditto with a conspiracy
to commit Honest Services Wire Fraud (18 U.S.C. 1343 & 1346). Again, it appears that this
Count is intended to encompass both Singh's efforts to obtain amendments to the Oyster Bay
concession agreements, as well as his alleged efforts to obtain Nassau County contracts.
Count 4 of the Indictment charges both Mr. Mangano and Mr. Venditto with a
substantive violation of Honest Services Wire Fraud, and appears to be directed specifically at
the Oyster Bay concession agreements. Somewhat confusingly, however, it charges Mr.
Mangano and Mr. Venditto of depriving both the Town of Oyster Bay and the County ofNassau
of their respective rights to honest services.
Count 5 of the Indictment charges Mr. Mangano only with a substantive violation of
Honest Services Wire Fraud, which appears to be directed specifically at the Nassau County
contracts. Notably, the Government does not allege that Mr. Venditto played any role in these
events.
Count 6 of the Indictment charges Mr. Mangano only with Hobbs Act Extortion ( 18
U.S.C. 1951[a][2]), based upon the allegation that Mr. Mangano obtained things of value
14
(Linda Mangano's salary and assorted gifts) from Singh "under the color of official right." Of
course the receipt of a salary or even a gift, standing alone, is entirely lawful. The Government
is additionally required to prove that Mr. Mangano performed or agreed to perform an "official
act" in exchange for such things of value, yet Count 6 does not specify which purported official
acts the Government is relying upon.
Finally, Counts 7 through 13 charge the Defendants with Obstruction and False
Statements. Count 7 alleges Edward and Linda Mangano with a Conspiracy to Obstruct Justice,
while Counts 8, 9 and 10 charge Linda Mangano with making false statements during proffers
with the Government. Each count relates to a different proffer date, however, the Indictment is
silent as to the specific statements which are alleged to be materially false.
ARGUMENT
I. COUNTS 1, 2 AND 3 OF THE INDICTMENT ARE DUPLICITOUS
"An indictment is impermissibly duplicitous where: 1) it combines two or more distinct
crimes into one count in contravention of Fed.R.Crim.P. 8(a)'s requirement that there be a
separate count for each offense, and 2) the defendant is prejudiced thereby." United States v.
Sturdivant, 244 F.3d 71, 75 (2d Cir. 2001). "If a court does find a count of an indictment to be
duplicitous, the court may dismiss that count, or it may require the government to elect to
proceed upon only one of the distinct crimes charged in the count." United States v. Willis, 415
F.Supp.2d 269, 272 (W.D.N.Y. 2007), citing United States v. Aguilar, 156 F.2d 1418, 1422-23
(9th Cir.1985).
In this case, Counts 1, 2 and 3 of the Indictment are obviously and fatally duplicitous. In
particular, the Government is alleging a series of distinct, quid pro quo transactions - some of
which concern Singh's efforts to influence the Oyster Bay town government, and others of which
15
relate to his attempts to obtain Nassau County contracts. While the former purported scheme
allegedly involved both Messrs. Venditto and Mangano, the Government does not allege that
6
Venditto had any involvement in Singh's efforts to obtain Nassau County contracts. Indeed,
fairly construed, the Government is actually alleging two separate and parallel bribery schemes.
Nevertheless, the Government has chosen to repeatedly conflate all of these separate transactions
into single counts. The result is a hopelessly flawed, confusing and fatally defective charging
instrument.
The most glaring example of such duplicity is Count 2 of the Indictment, which charges
the Defendants with substantive, Federal Program Bribery. In that Count the Government
broadly alleges:
In or about and between January 2010 and February 2015 ... the defendants
EDWARD MANGANO and JOHN VENDITTO, together with others, being
agents of local governments, to wit: Nassau County and the TOB, did knowingly,
intentionally and corruptly solicit and demand for the benefit of EDWARD
MANGANO and JOHN VENDITTO, and accept and agree to accept, one or
more things of value, from one or more persons, to wit: Co-Conspirator # 1,
intending to be influenced and rewarded in connection with business and one or
more transactions and series of transactions of such governments involving things
of value of $5,000 or more, while such governments were in receipt of, in any one
year period, benefits in excess of$10,000 under one or more Federal programs ...
Indictment 'if 25.
The likelihood of jury confusion, with the attendant possibility of a non-unanimous
verdict, is manifest here, where the Government is alleging that Singh sought to influence no
fewer than six separate transactions - four of which relate to the Town of Oyster Bay, and two of
6
While the Indictment asserts that Singh was awarded "Nassau County Contracts", this
term is actually a misnomer. As noted above, Mr. Singh's catering business was awarded a
single emergency procurement order during Hurricane Sandy. In the context of government
purchasing, a procurement order is not synonymous with a formal contact.
16
which relate to Nassau County. Indeed, as drafted, it will be nearly impossible to discern the
factual basis of a jury's verdict on this Count.
Likewise, the conspiracy counts - Counts 1 and 3 - charge Mr. Venditto and Mangano
together in a single, overarching conspiracy, despite the fact that Mr. Venditto had nothing to do
with the award of Nassau County contracts.
While it is true that a conspiracy count may have multiple illegal objects, it remains the
case that it must be based upon a single, unified agreement. As the United States Supreme Court
explained in Kotteakos v. United States, 66 S.Ct. 1239 (1946), an indictment fails to allege such
a single conspiracy when it is based upon a central, corrupting figure engaging in separate,
illegal transactions with multiple counterparties. That is precisely the case here, where it is
alleged that Singh separately sought to corrupt both the Town of Oyster Bay and Nassau County,
but where John Venditto is not alleged to have had any knowledge or involvement in the Nassau
County matters.
This rampant duplicity is prejudicial to the Defendants in this case - and not merely
because of the inevitable confusion it will engender in the jury. Indeed, there is a strong
argument (if not likelihood) that the Government intentionally crafted the Indictment in this
manner to obscure what would otherwise be glaring issues relating to the timeliness and legal
sufficiency of the charges, particularly as they relate to the Oyster Bay transactions.
Specifically, as set forth in Points II & III below, the Indictment as drafted improperly charges
Edward Mangano with Program Bribery and Honest Services Fraud in connection with decisions
undertaken in the Town of Oyster Bay, despite the fact that he is not agent of the Town for
purposes of 18 U.S.C. 666, and has no fiduciary relationship with the Town for purposes of 18
u.s.c. 1346.
17
As a result, the duplicitous structure of these counts creates a profo~d risk that Mr.
Mangano might be convicted upon an infirm legal theory. In such cases - where a jury is
presented with two possible legal bases to convict a defendant, one of which is infirm - reversal
is mandated unless a reviewing Court can "conclude beyond a reasonable doubt that the jury
verdict would have been the same absent the error." Neder v. United States, 521 U.S. 1, 18
(1999).
Accordingly, this Court should dismiss Counts 1, 2, and 3 of the Indictment as
duplicitous, or compel the Government to elect a single offense upon which it may proceed to
trial.
II. MOTION TO DISMISS COUNTS 1 AND 2 INSOFAR AS THEY CHARGE EDWARD

MANGANO IN CONNECTION WITH TRANSACTIONS BEFORE THE TOWN OF OYSTER BAY
Alternatively, this Court should dismiss Counts 1 and 2 of the Indictment to the extent
that they charge Mr. Mangano in connection with the amendments made to the Town of Oyster
Bay concession agreements.
First, Mr. Mangano cannot be held criminally liable under 18 U.S.C. 666 for
transactions which took place in the Town of Oyster Bay, unless he was an "agent" of"such ...
government." The Indictment is facially insufficient insofar as it does not (and cannot) allege
that Mr. Mangano was an agent of the Town of Oyster Bay.
Second, even if the Government somehow established that Mangano were an agent of the
Town, at least a portion of the Oyster Bay allegations occurred outside the statute of limitations.
In particular, the five year statute of limitation precludes the Government from relying upon the
June, 2010 amendment to the concession agreements to establish a violation of 18 U.S.C. 666.
18
A. The Indictment Fails to Allege that Edward Mangano was an

Agent of the Town of Oyster Bay for Purposes of 18 U.S.C. 666
As noted above, Count 2 of the Indictment charges Mr. Mangano with a single count of
Federal Program Bribery, which covers all of his alleged interactions with Harendra Singh. This
includes allegations that Mr. Mangano accepted things of value while intending to be influenced
in connection with "business and one or more transactions" pending before the Town of Oyster
Bay. Likewise, Count I charges Mr. Mangano with conspiring to "corruptly solicit . . . and
accept ... one or more things of value ... intending to be influenced and rewarded in connection
with business and one or more transactions ... of ... the TOB involving things of value of
$5,000 or more ..."
Thus, it appears that the Government is proceeding under a legal theory that Edward
Mangano may be criminally liable under 18 U.S.C. 666 if he accepted anything of value while
intending to be rewarded or influenced with respect to business transpiring before the Town of
Oyster Bay. However, the Government does not, and indeed cannot allege that Mr. Mangano
was an agent of the Town of Oyster Bay. As a result, this theory of liability is foreclosed by the
plain language of the statute, as well as interpretive case law.
Specifically, 18 U.S.C. 666(a)(l)(B) provides:

7
Whoever, if the circumstance described in subsection (b) of this section exists --
(l) being an agent of an organization, or of a State, local, or Indian tribal
government, or any agency thereof-- * * * (B) corruptly solicits or demands for
the benefit of any person, or accepts or agrees to accept, anything of value from
any person, intending to be influenced or rewarded in connection with any
business, transaction, or series of transactions of such organization, government,
3
Subsection (b) provides: The circumstance referred to in subsection (a) of this section is
that the organization, government, or agency receives, in any one year period, benefits in excess
of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee,
insurance, or other form of Federal assistance.
19
or agency involving any thing of value of $5,000 or more commits a federal

offense.
18 U.S.C. 666 (a)(l)(B) (emphasis added).
The statute further provides:
the term "agent" means a person authorized to act on behalf of another person or a
government and, in the case of an organization or a government, includes a
servant or employee, and a partner, director, officer, manager and representative.
18 u.s.c. 666 (d)(l).
As can be seen, the statute plainly requires the defendant be an agent or employee of the
governmental entity which the bribe payer is seeking to influence. Indeed, case law uniformly
interprets the statute in this manner.
For example, in United States v. Sunia, 643 F.Supp.2d 51 (D.C. 2009), a Court in the
District of Columbia had occasion to consider whether the defendants were properly charged as
"agents" of the executive branch of the American Samoa government. In particular, the
Government had alleged that the defendants in Sunia had used their respective positions in order
to obtain lucrative contracts supplying the Department of Education (part of the executive
branch) with furniture. During the relevant time periods, one of the defendants had been a
member of the American Samoa legislature, and the other had been counsel to the legislature.
Prior to trial, the defendants moved to dismiss that portion of the indictment which
charged them with violating 18 U.S.C. 666(a)(l)(A), based upon an argument that they were
not agents of the executive branch, and consequently could not be charged under 666.
The subsection at issue - 18 U.S.C. 666 (a)(l )(A) - provides criminal penalties for:
Whoever, if the circumstance described in subsection (b) of this section exists--

(1) being an agent of an organization, or of a State. local. or Indian tribal
government, or any agency thereof--* * * (A) embezzles, steals, obtain by fraud,
20
or otherwise without authority knowingly converts to the use of any person other
than the rightful owner ... property that (i) is valued at $5,000 or more, and (ii) is
owned by, or is under the care, custody or control of such organization,
government or agency;
Hence, 666 (a){l){A) - like 666(a)(l){B) - requires that the defendant be an agent of a
governmental organization, and that his conduct impact "such organization."
In response to this argument, prosecutors in Sunia argued that the term "agent" should be
construed broadly, and that the defendants - while not actually employed by the Treasury
Department - where part of "a tight knit group of political and social allies who work closely
within the power structure of the territory'', and who used their governmental positions to obtain
funds from the government. Id. at 62.
The District Court rejected this argument, and held, prior to trial, that the indictment
must be dismissed to the extent that it charged the defendants as agents of the executive branch.
As the Court noted, the plain and unambiguous language of the statute requires the defendant to
be an agent of the same governmental agency affected:
because 666(a){l){A) criminalizes only the conversion of funds that are "owned
by" or are "under the care, custody, or control of' the same "organization,
government, or agency" for which the putative wrongdoer is an "agent," the only
plausible interpretation of 666(a)(l){A) that gives effect to every provision in
the statute is one that restricts criminal liability for the conversion of funds from
an agency receiving federal funds to agents of that particular agency.
United States v. Sunia, 643 F.Supp.2d at 63.
The Court further noted that this common sense reading of the statute was consistent with
the legislative purpose of the statute, as expounded upon by the Supreme Court.
As the Supreme Court explained in Salinas, Congress intended for 666 to apply
where there is "a threat to the integrity and proper operation of [a] federal
program." Salinas, 522 U.S. at 61, 118 S.Ct. 469; see also Fischer v. United
States, 529 U.S. 667, 678, 120 S.Ct. 1780, 146 L.Ed.2d 707 (2000) (noting
Congress' "unambiguous intent" in passing 666 "to ensure the integrity of
organizations participating in federal assistance programs"). However, the
21
"integrity" of a federal program can only be "threat [ened]" from within; i.e., by
an agent of the program receiving federal funds.
Id. at 64.
Similarly, in United States v. Ferber, 966 F.Supp 90 (D. Mass. 1997), a District Court
dismissed 666 charges against a defendant based upon its determination that he was not an
agent of the public entities that were the target of the bribery scheme. The Government in that
case had alleged that the defendant - a financial advisor who consulted with public entities -
agreed to recommend specific investments in exchange for bribes. Nevertheless, the Court held
that because the defendant was not an employee or person authorized to act on behalf of his
public entity clients, he was not an agent of those entities chargeable under 666.
th
Finally, in United States v. Phillips, 219 F.3d 404 (5 Cir. 2000), the Fifth Circuit held
that a tax assessor operating within a Louisiana parish could not be guilty of violating 666
where he was not an agent of the parish. In that case, the Government had introduced evidence
that the tax assessor had secured a no-show job and benefits for a political supporter, who had
repaid him with kickbacks. Moreover, the Government also introduced evidence that the parish
in question had received oyer $10,000 in federal funds. Nevertheless, because the assessor was
not an officer or agent of the parish, his conviction was vacated.
The same result must obtain here where the Government does not allege that Edward
Mangano was an agent of the Town of Oyster Bay. Specifically, this Court should dismiss
Counts 1 and 2 of the Indictment to the extent that they allege that Mr. Mangano, an agent of
Nassau County, accepted things of value, intending to be influenced or rewarded in connection
with any business or transaction pending before the Town of Oyster Bay.
22
B. The 2010 Oyster Bay Concession Amendment is Outside the

Statute of Limitations for Purposes of 18 U.S.C. 666
As a general rule, the statute of limitations begins to run once a crime has been completed
- i.e., once all of the elements of the offense have occurred- regardless of whether the defendant
continues to engage in criminal conduct. See Pendergast v. United States, 317 U.S. 412,418, 63
S.Ct. 268, 271 (1943); United States v. Irvine, 98 U.S. 450, 452, 25 L.Ed. 193 (1879); United
States v. Sampson, 122 F.Supp.3d 11 (E.D.N.Y. 2015).
An exception to this general rule exists, however, with respect to "continuing offenses": a
specific category of crimes which are, by their very nature, inherently ongoing. Possessory
crimes are frequently cited as the proto-typical continuing offense.
The seminal case in defining "continuing offenses" is Toussie v. United States, 397 U.S.
112 (1970). As the Supreme Court made clear, the question is not merely whether, as a factual
matter, the criminal conduct continues over a period of time. Rather, a "continuing offense" is a
term of art which applies when "the explicit language of the substantive criminal statute compels
such a conclusion, or the nature of the crime involved is such that Congress must assuredly have
intended that it be treated as a continuing one." Id. at 115. Thus, the question of whether an
offense is "continuing" is not a factual issue, but one of statutory interpretation.
Because the "criminal limitations statutes are to be liberally interpreted in favor of
repose", and because the doctrine has the potential to render such limitations illusory, the
Supreme Court has warned that "the doctrine of continuing offenses should be applied in only
limited circumstances" and "are not to be too readily found." Id. at 115-116. Moreover, because
Congress knows how to create a continuous offense, in cases where the statute is silent as to
Congress's intent, that silence militates against construing the offense as continuous. Id. at 120.
23
Likewise, in considering whether an offense is "inherently" continuing, the Court cautioned that
equivocal or ambiguous statues should not be treated as continuous. Id. at 122
Applying this test, numerous Courts have found that 18 U.S.C. 666(a)(l)(A) - a close
corollary to 666(a)(l)(B) - does not evince any congressional intent to create a continuing
offense.
th
Thus, in United States v. Yashar, 166 F.3d 873 (7 Cir. 1998), the Seventh Circuit held
that " 666 is not a continuing offense as that term is defined in Toussie." Id. at 876.
Accordingly, the Court held that the statute of limitations commenced to run "from the date that
offense is 'committed,' - meaning complete." Id. In particular, the Court held that
embezzlement under 18 U.S.C. 666(a)(l)(A) "is committed and the limitations period begins to
run once all elements of the offense are established, regardless of whether the defendant
continues to engage in criminal conduct." Id. at 879-880.
Likewise, in United States v. Sunia - discussed at length above - the Court also had
occasion to consider whether the Government could prosecute defendants under 18 U.S.C. 666
for transactions taking place outside of the statute of limitation. Citing to Yashar, the Court
concluded that 666 was not a continuing offense. As a result, the Court held that the
indictment "must be dismissed to the extent that it encompasses conduct allegedly committed
beyond the five year statute of limitations period." Id. at 75.
Finally, in this very District the United States Attorney's Office has explicitly conceded
that 666(a)(l)(A) is not a continuing offense. Specifically, in United States v. Sampson, 122
F.Supp.3d 11 (E.D.N.Y. 2015), the Court noted that the Government had "concede[d] that
embezzlement under 18 U.S.C. 666 is not a continuing offense ..." - a concession which the
District Court fully agreed with. Id. at fn. 7.
24
Because there is nothing in 666(a)(l)(B) which would evince a congressional intent
different than that contained in 666(a)(l)(A), the same rule should apply here. Indeed, in
United States v. Pacchio/i, 718 F.3d 1294 (1 I th Cir. 2013), the Eleventh Circuit had occasion to
consider when the statute of limitation commences with respect to program bribery under 18
U.S.C. 666(a)(l)(B). For purposes of conducting its analysis, the Court expressly assumed that
program bribery was not a continuing offense, but nevertheless found that "the crime was
completed - that is, applying the ordinary rule" within the statute of limitations.
Accordingly, where there is nothing within 18 U.S.C. 666 which indicates a
congressional intent to create a continuous offense, and because we are unaware of any cases
treating it as such, this Court should decline to extend the statute of limitation beyond the five
year period proscribed by 18 U.S.C. 3282.
Taking the Government's allegations at face value, a completed offense under 18 U.S.C.
666 would exist the moment that Mr. Mangano corruptly accepted anything of value in
connection with any transaction having a value of $5,000 or more. According to the Indictment,
Linda Mangano commenced receiving a salary from Singh as of April 2010 (Indictment ,r,r 4,
23a), and the 2010 Town concession amendment was executed on June 9, 2010.
Because the Indictment did not issue until October 18, 2016 - more than five years after
the June 2010 amendment, that alleged transaction is outside of the statute of limitations period
for purposes of 18 U.S.C. 666. Accordingly, consistent with the decision in Sunia, this Court
should dismiss the Indictment to the extent that it charges Mr. Mangano with program bribery
transactions occurring outside the limitations period.
25
III. COUNTS 3 AND 4 SHOULD BE DISMISSED TO THE EXTENT TBAT THEY

CHARGE MR. MANGANO WITH DEPRIVING THE TOWN OF
OYSTER BAY OF ITS RIGHT TO HONEST SERVICES, BECAUSE
No FIDUCIARY RELATIONSHIP EXISTS BETWEEN MR. MANGANO AND THE TOWN
In Point II (a) above, we argue that Mr. Mangano cannot be charged with Federal
Program Bribery in connection with transactions before the Town of Oyster Bay, because he is
not an "agent" of that organization. While Honest Services Fraud does not require an identical
showing of agency, it does require proof that the Defendant stood in a fiduciary relationship to
the class of persons he is accused of defrauding. See Skilling v. United States, 130 S.Ct. 2896,
2930 (2010) (holding that honest services fraud reaches "offenders who, in violation of a
fiduciary duty, participated in bribery of kickback schemes."); United States v. Smith, 985
F.Supp.2d 547, 590 (S.D.N.Y. 2014) ("honest services fraud also requires the violation of a
fiduciary duty"); United States v. Milovanovic, 678 F.3d 713, 722 (9th Cir. 2012) ("A close
examination of the Supreme Court's opinion in Skilling reveals that embedded in the Court's
holding . . . is the implication that a breach of fiduciary duty is an element of honest services
fraud."); United States v. Nayak, 169 F.3d 978, 981 (7th Cir. 2014) (noting that Skilling "also
held that 'the violation of a fiduciary duty' was a prerequisite to an honest-services fraud
conviction").
However, as Justice Scalia warned in his Skilling dissent, defining the scope of such
fiduciary duties will frequently prove difficult, and existing precedent does little to clarify either
the source or precise contours of such purported duties. Indeed, as Justice Scalia' s pointed out:
None of the "honest services" cases, neither those pertaining to public officials
nor those pertaining to private employees, defined the nature and content of the
fiduciary duty central to the "fraud" offense. There was not even universal
agreement concerning the source of the fiduciary obligation-whether it must be
positive state or federal law . . . or merely general principles, such as the
"obligations of loyalty and fidelity" that inhere in the "employment relationship.
26
Skilling v. United States, 130 S. Ct. at 2936.
This case presents a prime example of such indeterminacy, where the Government has
alleged that Edward Mangano conspired to deprive, and did deprive, the Town of Oyster Bay of
its right to his honest services. See Indictment Counts 3 and 4.
Such allegations raise the obvious question: does the Nassau County Executive owe a
fiduciary duty to town governments and their constituents? If so, from whence does such an
obligation arise?
Generally, for a fiduciary relationship to exist, there must be a showing that the fiduciary
was specifically entrusted to act on behalf of, and in the best interests of, the principal. United
States v. Milovanovic, 678 F.3d 713, 722 (9 th Cir. 2012) ("A fiduciary is generally defined as a
person who is required to act for the benefit of another person on all matters within the scope of
their relationship; one who owes to another the duties of good faith, trust, confidence, and
candor.") Indeed, it is frequently said that the essential elements of a fiduciary relationship are
"reliance, de facto control and dominance." See United States v. Chestman, 941 F.2d 551, 568
(2d Cir. 1991); Manne/stein v. Kehillat New Hempstead, 11 N.Y.3d 15 (2008). With such
control comes a corresponding duty to act in the undivided interests of the principal. Birnbaum
v. Birnbaum, 73 N.Y.2d 461 (1989) ("[I]t is elemental that a fiduciary owes a duty of undivided
and undiluted loyalty to those whose interests the fiduciary is to protect.. .. This is a sensitive and
inflexible rule of fidelity ... ").
While it is frequently said, without elaboration, that a public official owes a fiduciary
duty to the public, what this means in practice is far less clear. Indeed, a number of scholars
have struggled with this precise question. See THE FALSE PROMISE OF FIDUCIARY GOVERNMENT,
Volume 89, Issue 3, Notre Dame Law Review (2-2014) ("All of which is to ask of fiduciary
27
theorists who would impose fiduciary duties on public officials: Which duties? The question is
not rhetorical. Fiduciary law is built around the axiom that 'the foremost duty which a fiduciary
owes to its beneficiary is undivided loyalty.' Translating from that context to public governance
is hardly straightforward.").
Specifically, we are not aware of any authority which provides or even suggests that a
County Executive owes a duty of loyalty to town governments existing within his county.
Notably, the Government does not allege in the Indictment that Mr. Mangano owed such a
fiduciary duty, much less describe the purported basis of such a legal obligation.
Indeed, it is hard to conceive of how such a duty could exist, where, in many situations,
the interests of the county may prove to be diametrically opposed to the interests of a town, as
well as to the citizens of that town. In fact this inherent tension is recognized by New York State
law, which statutorily precludes "any elective county officer" from simultaneously holding any
8
elective town office. See N. Y. County Law 411.
The County Executive neither controls town governance, nor is he entrusted to act on
behalf of such political subdivisions. In short, there is no coherent sense in which the Nassau
County Executive can be said to function as fiduciary on behalf of the Town of Oyster Bay.
Accordingly, the Government should be precluded from proceeding to trial on the legally
infirm theory that Edward Mangano owed a fiduciary duty to the Town of Oyster Bay and/or its
constituents. Moreover, because such a duty is not alleged in the Indictment, Counts Three and
Four should be dismissed to the extent that they charge Mr. Mangano with depriving the Town
of Oyster Bay of its right to honest services.
8
In fact, Nassau County is often in an adversarial position with the three Town
governments located within Nassau County. See, e.g. Matter of Town of N. Hempstead v. County
ofNassau, 24 N.Y. 3d 67 (2014).
28
IV. THIS COURT SHOULD HOLD THAT A PUBLIC OFFICER

CANNOT "PRESSURE OR ADVISE" ANOTHER PUBLIC OFFICIAL
WHOM HE DOES NOT DIRECT, SUPERVISE OR CONTROL
Pursuant to the Supreme Court's recent decision in McDonnell v. United States, 136 S.
Ct. 2355 (2016), the Counts in the Indictment charging Mr. Mangano with Honest Services
Fraud and Hobbs Act Extortion require the Government to prove that Mr. Mangano performed
an "official act" in exchange for something of value. The term "official act" is statutorily
defined in the general bribery statute - 18 U.S.C. 201 (a)(3)- as "any decision or action on any
question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or
which may by law be brought before any public official, in such official's official capacity, or in
such official's place of trust or profit."
In this case, the Government alleges that Mr. Mangano is responsible, not only for
official acts which took place in Nassau County, but also official acts undertaken by John
Venditto in the Town of Oyster Bay, because it claims Mr. Mangano "advised and pressured"
Mr. Venditto to undertake such acts. See Indictment ,r,r 11, 12.
This legal theory gives rise to a legal question of apparent first impression in applying
McDonnell. Namely, can a public official commit an "official act" by discussing with or
encouraging another public official to undertake an official act, where public official #1 has no
authority, power or formal influence over public official #2? For instance, if the Governor of
Michigan took campaign funds from a domestic automotive manufacturer, and then sought to
convince the Governor of California to adopt legislation favorable to such manufacturer, would
that constitute an official act sufficient to trigger criminal liability under the Hobbs Act or Wire
Fraud statutes? We respectfully submit that the answer is no.
As McDonnell made clear, the animating concern behind such statutes is the corrupting
29
influence of money upon governmental power - i.e., the ability to influence the outcome of a
"formal exercise of governmental power." Id. at 2358. As a result, the statute requires proof
that, in exchange for money (or other things of value), an official used his public authority in
order to implement a specific decision or action on a pending matter. The Court was clear that
generalized advocacy or support is not enough. Hence, merely "hosting an event, meeting with
other officials, or speaking with interested parties is not, standing alone, a 'decision or action'
within the meaning of 20l(a)(3), even if the event, meeting, or speech is related to a pending
question or matter. Instead, something more is required: 201(a)(3) specifies that the public
official must make a decision or take an action on that question or matter, or agree to do so." Id.
at 2370.
In a case where a public servant advocates for a constituent in an area where he has no
authority, there is no meaningful sense in which such advocacy constitutes official action on a
pending matter. Indeed, as the Court noted in McDonnell:
Conscientious public officials arrange meetings for constituents, contact other

officials on their behalf, and include them in events all the time. Representative
government assumes that public officials will hear from their constituents and act
appropriately on their concerns.
Id. at 2372 (emphasis added).
Moreover, while the Supreme Court stated that an official act might be established where
a public official "us[es] his official position to exert pressure on another official to perform an
official act", the Court's hypothetical clearly assumed a scenario in which public official #1
exercises some degree of control or authority over public official #2. Id. at 2372. Thus, the
Court stated that Governor McDonnell might have been properly convicted if the jury found that
he agreed to exert pressure upon subordinate state officials to initiate a state funded research
study, or to alter the state health plan. Id. at 2374-2375. In that example, however, the Governor
30
would obviously know, or reasonably expect, that such pressure would result in the performance
of an official act by his subordinate.
Indeed, the Court was very careful to distinguish pressure from mere expressions of
support. As the Court warned:
Simply expressing support for the research study at a meeting, event or call ...
does not qualify as a decision or action on the study, as long as the public official
does not intend to exert pressure on another official ...
Id. at 2371.
Hence, while any effort to persuade another official might be construed as "pressure" in
the general parlance, the Supreme Court clearly had something more in mind. Rather, the Court
was describing a scenario in which a public official "us[es] his official position to exert
pressure" - i.e. where public office provides the defendant with a degree of formal leverage to
affect the outcome in question. Id. at 23 72 (emphasis added). And this makes sense; such a
scenario presents a clear and unambiguous situation in which money is buying a formal exercise
of governmental power - the very underpinnings of the Honest Services statute.
The situation here, however, is not akin to the example of "pressure" provided in
McDonnell, because Mr. Mangano did not direct, supervise, or exercise any degree of control
over John Venditto. At most, the Government appears to be alleging that one politician sought to
encourage or persuade another politician to undertake a certain course of action. But this is not
"pressure" under th~ McDonnell standard.
The Government may seek to avoid this issue by arguing that, even in the absence of
"pressure", Mr. Mangano could still be liable for "advising" Venditto to amend the concession
agreements. And it is true that, in addition to "pressure", McDonnell also forbids a politician
31
from "using his official position ... to advise another official, knowing or intending that such
advice will form the basis for an 'official act' by another official." Id. at 2372.
But again, it is clear that the Court was not using the term "advice" in a loose or general
sense. Indeed, if it were, it would be impossible to reconcile the Court's prohibition against
"advice" with its simultaneous assurance that an official may lawfully "express support" for a
political donor's cause. Id. at 2371.
Rather, the Court was referring to formal advice rendered by a public official "using his
official position." The key to understanding the Court's meaning here comes in its
accompanying citations to United States v. Birdsall, 233 U.S. 223, 34 S.Ct. 512 (1914). In
particular, the Court stated:
In addition, if a public official uses his official position to provide advice to

another official, knowing or intending that such advice will form the basis for an
"official act" by another official, that too can qualify as a decision or action for
purposes of 201(a)(3). See United States v. Birdsall, 233 U.S. 223, 234, 34
S.Ct. 512, 58 L.Ed. 930 (1914) (finding "official action" on the part of
subordinates where their superiors "would necessarily rely largely upon the
reports and advice of subordinates ... who were more directly acquainted with"
the "facts and circumstances ofparticular cases").
Id. at 2370 (emphasis added).
As the Court explicitly explained, Birdsall involved a scenario in which public officials
were bribed to furnish their superiors with formal recommendations, advising such superiors to
undertake specific official acts. 9
9
The defendants in Birdsall were officers hired by the Commissioner of Indian Affairs to
enforce "the suppression of the liquor traffic" among Native Americans. As part of their
employment, they were "charged with the duty of informing and advising the Commissioner of
Indian Affairs, either directly or through other subordinates, concerning all matters connected
with the conviction and punishment of persons violating the laws of the United States in
reference to the liquor traffic affecting the Indians, and particularly to inform the said
Commissioner whether or not the effective suppression of the liquor traffic with and among
Indians would be furthered or prejudiced by executive or judicial clemency in any particular
32
Taken in this context, "advice" is best understood as the inverse of "pressure"; whereas
"pressure" involves the exercise of formal authority to influence the actions of subordinate
officials, "advice" involves the exercise of formal authority to influence the actions of reliant
superiors. In both cases, however, the key feature is the use of the authority which is attendant
to a public office, in order to effectuate an official act.
The alleged facts in this case fail to make out a prima facie case of either advice or
pressure, as Mr. Venditto was neither a political subordinate susceptible to pressure, nor a
political superior who necessarily relied upon Mr. Mangano for advice and/or formal
recommendations.
In sum, the Government is seeking to expand McDonnell well beyond its self-evident
parameters, in a manner which, once again, threatens to render the statute unconstitutionally
vague. We respectfully submit that this Court should reject the Government's expansive gloss,
and should hold that, as matter of law, an official act requires proof that the Defendant "used his
official position" to apply pressure or provide advice. In other words, the Government should be
compelled to allege and prove that Mr. Venditto was subject to Mr. Mangano's authority,
control, or formal influence.
Because the Government has not so alleged, and cannot meet this burden, Counts 3, 4 and
6 should be dismissed against Mr. Mangano to the extent that they relate to the Town of Oyster
Bay concession agreements.
case." Birdsall, 233 U.S. at 228. As the Court recounted in McDonnell, "the official action at
issue in Birdsall was advising the Commissioner of Indian Affairs, contrary to the truth, that the
facts of the case warranted granting leniency to certain defendants convicted of unlawfully
selling liquor to Indians. That decision or action fits neatly within our understanding of
20 I (a)(3): It reflected a decision or action to advise another official on the pending question
whether to grant leniency." Id. at 2371 (internal citations omitted).
33
V. THE GOVERNMENT SHOULD BE PRECLUDED FROM PROCEEDING ON A LEGAL

THEORY THAT THE ULTRA VIRES 2011/2012 TOWN OF OYSTER BAY AMENDMENTS
CONSTITUTED "OFFICIAL ACTS" UNDER McDONNELL V. UNITED STATES
Alternatively, even if the Government could somehow proceed against Edward Mangano
based upon his "official acts" performed within the Town of Oyster Bay, it would nevertheless
be inappropriate for prosecutors to argue that such "official acts" included the rogue and
fraudulent Fred Mei "amendments", where such documents were never approved by Town
government, and had no force of law.
As noted above, an "official act" is statutorily defined as "any decision or action on any
question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or
which may by law be brought before any public official, in such official's official capacity, or in
such official's place of trust or profit." 18 U.S.C. 201 (a)(3)
In interpreting this language, McDonnell held that the phrase "any question, matter,
cause, suit, proceeding or controversy" ''connotes a formal exercise of governmental power..."
Likewise, the Court reasoned that the term may by law be brought "conveys something within
the duties of an official's position - the function conferred by the authority of his office."
McDonnell, 136 S. Ct. at 2369.
In sum, an "official act" is a decision or action on a "question, matter, cause, suit,

proceeding or controversy." The "question, matter, cause, suit, proceeding or
controversy" must involve a formal exercise of governmental power ...
Id. at 2371-2372.
Furthermore, while it is true that the Government may satisfy its burden by showing that
Mangano advised or pressured another public official to perform such an "official act"
(assuming the existence of authority, supervision or control over the other public official, see
34
Point IV above) there still must be an intent or agreement to effectuate an official act - i.e., a
formal exercise of governmental authority on some pending matter.
As noted above, Counts 3, 4 and 6 of the Indictment charge Mr. Mangano (in whole or in
part) with transactions taking place in the Town of Oyster Bay. In such cases the "official acts"
which the Government relies upon are the amendments to the TOB concession agreements.
Specifically, the Government alleges that the official acts are "the amendment to the
concession agreement between the TOB and Restaurant #4 [ToBay] in 2010, and the subsequent
concession amendments in 2011 and 2012 between the TOB and Restaurants #3 [Woodlands]
and #4." Indictment ,I 11. However, the Indictment does not allege that the 2011 or 2012
concession amendments were ever executed by John Venditto. Instead, it claims that Mr.
Venditto "had another TOB official sign" such amendments on his behalf. Notably, even if this
allegation were true, it would still fail to result in a binding contract with the Town, as such
amendments were never authorized by the Town Board, and (unlike the 2010 amendment)
amounted to an unconditional guarantee ofSingh's private loans, rendering them unenforceable.
Indeed, as noted above, the Honorable Sandra Feuerstein recently found that the
purported 2011 amendment to the concession agreement constituted an ultra vires act which was
never signed by Venditto, nor ratified by the Town Board, and which had no legal effect.
Moreover, based upon the facts set forth in the Town's recent civil complaint, it appears that
none of the supposed amendments - other than the original 2010 amendment - constituted an
official governmental action by the Town of Oyster Bay. Rather, it appears that the documents
were nothing more than forgeries orchestrated by a rogue Town employee in return for cash
payments by Singh.
35
In light of this troubling information, we are asking the Court to preclude the
Government from proceeding under a theory that the creation of such forged documents, which
had no legal effect, and which were not binding upon the Town, constituted "official acts" under
McDonnell v. United States. Moreover, we would note that, in the absence of such evidence, the
Government is left only with the June 2010 amendment. While the 2010 amendment did
constitute an official governmental act by the Town of Oyster Bay, it is, standing by itself,
outside of the statute of limitations.
Accordingly, to the extent that the Government lacks any good faith basis to assert that
the 2011 and 2012 concessions amendments constituted "official acts" sufficient to support a
conviction under either an Honest Services or Hobbs Act theory of liability, the remaining
allegations are outside of the statute of limitations. In such an event, the Honest Services and
Hobbs Act counts of the Indictment should be dismissed to the extent that they pertain to the
Town of Oyster Bay concession agreements.
VI. MOTION FOR DISCLOSURE OR REVIEW OF THE GRAND JURY MINUTES
In the alternative, if the Government purports to have evidence which would demonstrate
that the 2011 and 2012 amendments were, in fact, "formal exercises of governmental power" -
i.e., legally binding documents ratified by the Town Board - this Court should require the
Government to disclose those portions of the Grand Jury minutes to defense Counsel, or conduct
an ex-parte review of such minutes, in light of the significant amount of public information
which directly contravenes such allegations. Such disclosure lies within the sound discretion of
the District Court pursuant to F.R.C.P. Rule 6(e)(3)(E)(ii). See Pittsburgh Plate Glass Co. v.
U.S., 79 S. Ct. 1237, 360 U.S. 395 (1959).
36
At this juncture, and given the ongoing public litigation, including Judge Feuerstein's
recent decision, the Government is fully aware that the 2011/2012 concession amendments were
never approved by the Town Board and lacked force of law. To the extent that the Government
presented information to the Grand Jury which suggested otherwise (which certainly appears to
be the case), two legal issues are raised.
First, if the Government knows that materially false information was presented to the
Grand Jury, it has an obligation to correct such misinformation. While "an indictment returned
by a legally constituted and unbiased grand jury is generally not subject to attack on the ground
that it is based on inadequate or incomplete evidence", prosecutors are not permitted to proceed
on an indictment when they become aware that it was secured through grand jury testimony
which was false and misleading. See United States v. Guillette, 541 F.2d 743, 752 (2d Cir.
1976). Hence, "where the government knows that perjured testimony has been given to the
grand jury and that this testimony is material to the grand jury's deliberations, due process
requires that the prosecutor take such steps as are necessary to correct any possible injustice.
Where jeopardy has not yet attached, it generally is proper for the prosecutor to return to the
grand jury and seek a new indictment untainted by the perjury." Id. at 752-753, citing United
States v. Basurto, 491 F.2d 781, 785-786 (9th Cir. 1974) (Defendant's right to due process was
violated where defendants had to stand trial on an indictment which the government knew was
based on perjured testimony, the perjured testimony was material, and jeopardy had not
attached).
Second, if the Government presented evidence to the Grand Jury that the 2011/2012
concession amendments were duly authorized "official acts," to the extent that prosecutors are
now seeking to move away from that assertion, such a re-jiggering of the Government's theory
37
raises the specter of a variance or constructive amendment - i.e., that the Defendants might be
convicted upon a theory of liability that was never presented to or voted upon by the Grand Jury.
See United States v. Mollica, 849 F.2d 723, 728-729 (2d Cir. 1988).
In order to guard against either of these troubling outcomes, we respectfully submit that
this Court should exercise its discretion to order a partial disclosure of the relevant portion of the
Grand Jury minutes, or in the alternative, to undertake an in-camera review of the same.
VII. THE COURT SHOULD SEVER THE TRIALS OF MESSRS. MANGANO AND VENDITTO
For the reasons set forth below, we are respectfully asking this Court to sever the
Defendants' trials pursuant to FRCP Rule 8(b), or alternatively, under Rule 14.
A. Misjoinder Under FRCP Rule 8(b)
The duplicitous nature of the Indictment, makes clear that, fairly read, this case describes
two parallel bribery conspiracies, the first of which relates to Harendra Singh's efforts to
influence the Town of Oyster Bay, and the second of which relates to his effort to obtain
business from Nassau County. Although prosecutors would, no doubt, like to try the cases
together for the sheer public spectacle of having two prominent Long Island politicians in the
same court room, such strategic considerations cannot justify a joint trial in this matter.
F.R.C.P. Rule 8(b) provides:
(b) Joinder of Defendants. The indictment or information may charge 2 or more

defendants if they are alleged to have participated in the same act or transaction,
or in the same series of acts or transactions, constituting an offense or offenses.
The defendants may be charged in one or more counts together or separately. All
defendants need not be charged in each count.
"Under this rule, when multiple defendants are involved, joinder is improper unless all
offenses arise out of the same series of acts or transactions. . . It is not enough that the acts or
offenses alleged are similar." United States v. Martin, 561 F.2d 849, 853 (9 th Cir. 1977) (internal
38
citations omitted). Thus, ''joinder is improper where commission of one of the offenses neither
depended upon nor necessarily led to the commission of the other and proof of the one act
neither constituted nor depended upon proof of the other." United States v. Rajaratnam, 153
F.Supp.2d 299, 304 (S.D.N.Y. 2010), citing United States v. Halper, 590 F.2d 422, 429 (2d Cir.
1978).
Applying this test, courts have repeatedly found that, where an indictment outlines
multiple, distinct conspiracies, one of which involves all defendants, but others which do not,
joinder is improper. See Rajaratnam, 153 F.Supp.2d at 308 ("Indeed numerous courts in this
district have held that charging one defendant in two conspiracy counts does not render the
counts properly joined where only one of the counts charges a second defendant.").
Hence, in United States v. Lech, 161 F.R.D. 255 (S.D.N.Y. 1995), the Government had
charged three contractors (including Lech) with conspiring to bribe public officials, in order to
obtain asbestos removal contracts in connection with three separate projects. The Government
alleged that all three of the contractors - including Lech - had paid bribes on one of the projects,
but conceded that Lech had no direct involvement in the other two projects. Under these
circumstances, the District Court held that Lech was improperly joined with his co-defendant
under Rule 8(b). As the Court noted, "[i]t is well settled that ... two separate transactions do not
constitute a 'series' within the meaning of Rule 8(b) merely because they are of a similar
character or involve one or more common participants." Id. at 256; see also United States v.
Gentile, 60 F.R.D 686 (S.D.N.Y. 1973) (distinct and separate bribery schemes not properly
joined, despite similar nature of offenses and common participants); United States v. Giraldo,
859 F.Supp. 52 (E.D.N.Y. 1994) Goinder of defendants was improper where indictment charged
39
two separate conspiracies, the second of which involved only one of the charged defendants);
United States v. Menashe, 741 F.Supp. 1135 (S.D.N.Y. 1990) (same).
In response to the above authority, prosecutors will predictably argue that the Indictment
in this case charges the Defendants together in one unified conspiracy, and that as a result,
joinder is proper based upon the face of the charging instrument. However, it is also clear- from
the face of the Indictment - that John Venditto is not alleged to have played any role in the
alleged discussions concerning the procurement of Nassau County contracts. Under such
circumstances, the Government's exercise in creative drafting should not be permitted to obscure
reality. Indeed, if it is confirmed, at trial, that the Government has charged a single conspiracy
for strategic purposes, and without "a reasonable expectation that sufficient proof would be
forthcoming at trial," it may become necessary to order severance at the close of the
Government's case. See Stern v. United States, 409 F.2d 819 (2d Cir. 1969) Goinder based upon
common scheme is appropriate, "unless the charge of a concert of action was included in the
indictment in bad faith, because it was alleged without a reasonable expectation that sufficient
proof would be forthcoming at trial."); citing United States v. Aiken, 373 F.2d 294 (2d Cir.
1967). At that juncture however, the Defendants will have already been irreversibly prejudiced
(see Point B, infra).
In light of this, under similar circumstances, courts have looked beyond the face of an
indictment in order to determine whether the evidence actually supports joinder. Thus, in United
States v. Ca"ozza, 728 F.Supp. 266 (S.D.N.Y. 1990) the Court ordered the trial of the defendant,
Carrozza, severed from that of his two co-defendants (Fava and DiMatteo), despite the fact that
all three were charged together in a single conspiracy count. The case involved allegations of
illegal bookmaking and extortionate debt collection. In particular, the Government alleged that
40
Carrozza, a bookmaker, had used the services of an enforcer named "Carr" to collect his debts.
Carrozza subsequently agreed to permit Fava and DiMatteo to use Carr's services, in order to
collect their own debts. Based on this, the Government charged Carrozza, Fava and DiMatteo in
a single conspiracy to commit extortion. The Government additionally charged Carrozza with a
series of bookmaking counts, and Fava and DiMatteo with a series of substantive charges
relating to their separate debt-collection activities. While the Court acknowledged that a joint
conspiracy charge will typically suffice for joinder, the underlying facts of the case failed to
satisfy Rule 8(b). As the Court noted:
Generally, a conspiracy charge will facilitate the establishment of the necessary

common scheme or plan. United States v. Bernstein, 533 F.2d 775, 789 (2d Cir.),
cert. denied 429 U.S. 998, 97 S.Ct. 523, 50 L.Ed.2d 608 (1976). Thus, the
defendants probably could be joined in one indictment based on counts four and
five alone. However, when additional counts that are unrelated to the general
conspiracy are alleged, the government must show they are part of a common plan
to properly join them. The government attempts to establish this link by implicitly
suggesting that a "wheel conspiracy" exists, with Carr at the hub and the various
defendants connected to him by the wheel's spokes. Since the defendants were
joined in one conspiracy and since they each used Carr in their individual
activities, it is suggested that, a fortiori, a common scheme exists.
The problem with the government's argument is that while Carr is located at the
center of the wheel and is joined to each of the defendants, there is virtually no
outer rim connecting Carrozza to the other defendants. . .This situation is
analogous to that presented in Kotteakos v. United States, 328 U.S. 750, 66 S.Ct.
1239, 90 L.Ed. 1557 (1946). In Kotteakos, the government attempted to establish
the existence of a single conspiracy by nineteen defendants. It was alleged that
each of the defendants utilized the services of Simon Brown to obtain loans under
the National Housing Act. However, there was no connection among the
defendants. The Court found that the proof offered was not of one conspiracy but
of several as there was no "rim of the wheel to enclose the spokes." Id. at 755, 66
S.Ct. at 1243. Quoting from the circuit court's opinion, the Supreme Court noted,
"Thieves who dispose of their loot to a single receiver-a single 'fence'-do not
by that fact alone become confederates: they may, but it takes more than
knowledge that he is a 'fence' to make them such." Id. (quoting United States v.
Lekacos, 151 F.2d 170, 173 (2d Cir.1945)).
Id. at p. 270.
41
An identical situation exists here, where the Government has alleged a wheel and spoke
conspiracy with Singh in the center, but where the individual spokes - i.e., the Nassau
allegations and the Oyster Bay allegations - are not connected with one another. Accordingly,
this Court should order separate trials for Messrs. Venditto and Mangano.
In the alternative, to the extent that the Government is seeking to justify joinder based
upon its decision to charge a single, unified conspiracy, this Court should, at the very least,
examine the Grand Jury minutes to determine whether the Government's charging decision bears
any realistic relationship to the evidence. See United States v. Camacho, 939 F.Supp. 203, 206
(S.D.N.Y. 1996) ("In the case at bar, the Court required the government to submit all pertinent
grand jury testimony in order to determine whether this superseding indictment is based upon
evidence sufficient to show a relationship between the offenses charged sufficient to satisfy the
test set forth in Rule 8(b) ... It is immediately apparent that the superseding indictment fails that
test.").
B. Antagonistic Defenses
In the alternative, this Court should exercise its discretion in order to sever the trials of
the Defendants pursuant to FRCP Rule 14(a), which provides:
(a) Relief. If the joinder of offenses or defendants in an indictment, an

information, or a consolidation for trial appears to prejudice a defendant or the
government, the court may order separate trials of counts, sever the defendants'
trials, or provide any other relief that justice requires.
The Supreme Court has held that a "trial judge has a continuing duty at all stages of the
trial to grant a severance if prejudice does appear." Schaffer v. United States, 362 U.S. 511, 516,
80 S.Ct. 945 ( 1960). Such prejudice exists when "there is a serious risk that a joint trial would
compromise a specific trial right of one of the defendants, or prevent the jury from making a
42
reliable judgment about guilt or innocence." Zafiro v. United States, 506 U.S. 534, 539, 113
S.Ct. 933 (1993).
In the instant case, the peculiar structure of the Indictment sets up an inherent conflict
between the Defendants. Specifically, the Government simultaneously alleges that John
Venditto agreed to assist Singh with the concession amendments because: (a) he was being
bribed by Mr. Singh, and (b) because he was being "advised and pressured" by Edward
Mangano. At trial, Mr. Mangano will seek to establish that he did not undertake any steps to
pressure Mr. Venditto, and indeed, that Mr. Venditto decided independently to assist Singh in
obtaining finances for the benefit of the Town's properties. Essentially, Mr. Mangano will argue
that the decision to authorize such amendments belonged to Venditto alone, and that, in fact, Mr.
Venditto had repeatedly executed favorable amendments in the past, long before Mangano was
even elected County Executive. Such an argument is likely to prove harmful to Mr. Venditto.
Likewise, it is certainly possible that Mr. Venditto will argue at trial that any actions
undertaken in connection with the amendments were not in exchange for the (rather paltry)
benefits that were allegedly conferred upon Venditto, but rather to appease some purported
request from Mr. Mangano.
In this regard, a joint trial presents the real possibility of mutually antagonistic defenses,
with each Defendant effectively pointing his finger across the defense table. Indeed, even if such
a scenario does not rise to the level of mutually antagonistic defenses, it is certainly enough to
raise serious concerns about the fairness of a prospective joint trial. See April 19, 2017
Memorandum and Order in United States v. Shkreli, Docket No. 15-CR-637 (KAM) (ordering
severance even in the absence of mutually antagonistic defenses, where conflicting trial
strategies threatened to deny defendant constitutional right to a fair trial).
43
VIII. THE COURT SHOULD ORDER DISMISSAL OF THE

INDICTMENT OR DISCOVERY REGARDING SELECTIVE PROSECUTION
The myriad, glaring problems with the Government's Indictment, its theory of
prosecution, and its unwieldy attempt to join the cases against Messrs. Venditto and Mangano all
raise questions as to why the Government chose to pursue this case in the manner in which they
have. Counsel's investigation into this question has revealed a troubling answer: that at the time
of the Indictment, the Department of Justice (then under a Democratic administration), was being
pressured to bring this Indictment by political operatives within Nassau County, for the express
purpose of impacting the November 2016 election.
While prosecutors have broad discretion in deciding whom they will prosecute, it is
beyond cavil that such decisions may not be dictated by arbitrary classifications, such as political
affiliation. See United States v. Berrios, 501 F.2d 1207, 1209 (2d Cir. 1974) ("Selective
prosecution then can become a weapon used to discipline political foe and the dissident ... The
prosecutor's objective is then diverted from the public interest to the punishment of those
harboring beliefs with which the administration in power may disagree."), citing to United States
v. Falk, 419 F.2d 616 (7th Cir. 1973); United States v. Steele, 461 F.2d 1148 (9th Cir. 1972).
Where a Court finds that pr~secutors have violated a defendant's constitutional right to
equal protection under the law, such a finding of "selective prosecution" may result in dismissal
of the Indictment. As this Court has explained:
To support a defense of selective or discriminatory prosecution, a defendant bears

the heavy burden of establishing, at least prima facie, ( 1) that, while others
similarly situated have not generally been proceeded against because of conduct
of the type forming the basis of the charge against him, he has been singled out
for prosecution, and (2) that the government's discriminatory selection of him for
prosecution has been invidious or in bad faith, i.e., based upon such impermissible
considerations as race, religion, or the desire to prevent his exercise of
constitutional rights. These two essential elements are sometimes referred to as
'intentional and purposeful discrimination.'
44
United States v. Berrios, 501 F.2d at 1211 (holding that lower Court did not abuse
discretion in ordering discovery as to whether defendant was prosecuted based upon political
affiliation).
Courts have also recognized that defendants will frequently not be in a position to prove
selective prosecution - even where it has occurred - because "most of the relevant proof in
selective prosecution cases will normally be in the Government's hands." See Wayte v. United
States, 470 U.S. 598, 624 (1985) (Marshall J., dissenting). Accordingly, the Supreme Court has
held that a defendant is entitled to discovery when he sets forth "some evidence tending to show
the existence of the essential elements of a selective prosecution claim." United States v.
Armstrong, 517 U.S. 456, 4 70 ( 1996). Hence, to obtain discovery, the Defendant is required to
produce some evidence that: (1) the Government's decision to prosecute was motivated by
constitutionally impermissible considerations (such as party affiliation), and (2) that other,
similarly situated persons outside of the defined class were not prosecuted.
In this case, Mr. Mangano is able to meet both of these burdens. Specifically, the
evidence of an impermissible motive comes in the form of a sworn affidavit, detailing a
conversation with Robert McDonald, a then prominent figure in the Nassau County Democratic
party, wherein Mr. McDonald described efforts undertaken by Jay Jacobs (Chairman of the
Nassau County Democratic Committee since 200 l) to secure the instant indictment in advance of
the 2016 election.
Second, the evidence of disparate treatment is supplied by the Government's differential
treatment of Democratic Mayor of New York City, Bill de Blasio, who appears to have engaged
in conduct almost identical to that alleged in this Indictment, and yet, has never been charged.
45
A. The Affidavit of Joseph Muscarella

Provides Evidence of Selective Prosecution
In April of 2017, counsel obtained a sworn affidavit from Joseph Muscarella, a Town
Councilman for the Town of Oyster Bay. See Muscarella Affidavit, attached as Exhibit I to the
Keating Aff. In that affidavit, Mr. Muscarella describes a conversation with Robert McDonald,
at the time, an active member of the Nassau County Democratic Party, and a prominent member
of the Nassau County Democratic Committee. During that conversation, Mr. McDonald
recounted how Jay Jacobs sought to bring about the filing of the instant Indictment in the run up
to the 2016 election. Mr. Jacobs has been the Nassau County Democratic Chairman since 2001,
formerly served the New York State Democratic Chairman, and is an At-Large Member of the
Democratic National Committee and serves on its Credentials and Finance Committees. In
addition, he is also a prominent contributor to the Clinton Foundation, and was an active
fundraiser for Hillary Clinton's 2016 presidential campaign. Indeed, in 2016, Mr. Jacobs hosted
two fundraisers for Ms. Clinton on Long Island, which were attended by Ms. Clinton and her
husband, and he also hosted the Clintons at his Laurel Hollow residence.
According to Mr. McDonald, Jay Jacobs approached former President Bill Clinton in the
run up to the 2016 election and told him "that he needed the indictment of Venditto and the
Manganos 'to be done and he needed it now'." Id. at ,I 9.
According to McDonald, Jacob's purpose of seeking such an indictment was to influence
the 2016 New York State Senate race. In particular, with the balance of power up for grabs in
the New York State Senate, the Nassau County Democratic Committee was targeting the senate
seat held by Republican Michael Venditto - John Venditto' s son - in District 8 of Long Island.
Mr. Jacobs believed that the criminal indictment of Venditto and Mangano - coming in the
46
immediate run up to the election - would significantly enhance the Democratic Party's chances
of seizing control of the Senate. Id.
Policies promulgated by the United States Department of Justice specifically seek to
protect against such practices. Hence, in 2012, Attorney General Eric Holder issued a
Memorandum entitled "Election Year Sensitivities", which states:
Simply put, politics must play no role in the decisions of federal investigators or
prosecutors regarding any investigations or criminal charges. Law enforcement
officers and prosecutors may never select the timing of investigative steps or
criminal charges for the purpose of affecting any election, or for the purpose of
giving an advantage or disadvantage to any candidate or political party. Such a
purpose is inconsistent with the Department's mission and with the Principles of
Federal Prosecution.
See DOJ Memorandum, attached as Exhibit K to the Keating Aff.
The memorandum further notes that the "Hatch Act" prohibits the Department of Justice
from using its authority for the purpose of affecting election results, and encourages prosecutors
who are considering bringing such politically sensitive charges "near the time of a primary or
general election" to contact the Public Integrity Section of the Criminal Division for further
guidance.
Despite these internal policies, the Indictment in this case was brought - after almost two
years of investigation - a mere two weeks prior to the November 2016 general election, just as
reportedly requested by Jay Jacobs. And just as Mr. Jacobs reportedly predicted, such charges
assisted the Democratic Party in securing 32 seats in the New York Senate - including that
which had previously belonged to Michael Venditto, who lost his bid for reelection to Democrat
John Brooks by a narrow margin. See Muscarella Affidavit at ,r 11.
We respectfully submit that the sworn affidavit of Mr. Muscarella, combined with the
Government's actions in bringing an indictment in the immediate run up to a general election -
47
in direct contravention of its own policies - presents sufficient evidence of an improper, political
motivation to merit discovery in the instant matter.
B. The Non-Prosecution of Mayor Bill de Blasio Provides

Evidence that Similarly Situated Persons Have Been Treated Differently
While defendants frequently resort to bare statistics in an effort to show that similarly
situated persons have not been targeted for prosecution, the evidence in this case is much more
clear-cut, and closer to home.
In particular, the Government is in possession of extensive evidence that Democratic
New York City Mayor Bill de Blasio engaged in conduct with Harendra Singh which is virtually
indistinguishable from that alleged in the instant Indictment. Indeed, upon information and
belief, Mr. Singh has cooperated with the Government by providing them information relating to
his dealings and campaign contributions to Mr. de Blasio. Nevertheless, Mr. de Blasio is not
facing a federal indictment.
The facts relating to the Singh - de Blasio dealings are laid out in detail in a July 24, 2017
New York Times Article entitled "The Mayor and the Restaurateur: How de Blasio Sought Help
for an Early Donor." Specifically;the article details the significant financial contributions made
by Mr. Singh to Mayor de Blasio, and how the mayor, in return, intervened in negotiations
relating to Mr. Singh's lease of Water's Edge, a city-owned restaurant located in Long Island
City, Queens. See New York Times Article, attached as Exhibit L to the Keating Aff.
According to the New York Times piece, which quotes extensively from email
correspondence obtained from the city, Singh, who had donated approximately $33,000 to Mr.
de Blasio's political campaigns, approached the mayor at a 2014 fundraiser to seek his
intervention. At the time, Mr. Singh owed the city roughly $1.2 million in back rent and
penalties, and was seeking a long term renewal of his lease on favorable terms. That same night,
48
the mayor's aid sent an email to Stacey Cumberbatch, one of the city employees in charge of the
negotiations, infonning her that the mayor was personally interested in the negotiations, and
directing her to meet with Singh "ASAP".
Thereafter, the mayor personally called Ms. Cumberbatch. The New York Times article
quotes Ms. Cumberbatch' s attorney as stating:
"The mayor and his staff put tremendous pressure on Stacey to give Harendra
Singh a sweetheart deal, a process that started with a call directly from the
mayor", her lawyer, Mr. Walden, said in a statement, calling her a "hero" for
pushing back against Mr. de Blasio's effort on behalf of Mr. Singh. "She resisted
that pressure and, as a result, City Hall seized control of negotiations with Singh."
Id. at p. 4.
Indeed, as detailed in the article, Cumberbatch and her colleague Ricardo Morales
repeatedly sought to accommodate Singh with reduced rent and other benefits, but Singh
remained dissatisfied. Moreover, Mr. Singh made it clear that he expected to receive preferential
treatment because of his donations to Mayor de Blasio - in other words, that there was a clear
quid pro quo. "He said, 'I'm an important donor to the mayor,', and it would be very good ifhe
could get the deal done." Id. at p. 6. Mr. Morales, like Ms. Cumberbatch, has publicly stated
that he was being pressured by the mayor. "It's obvious there's a push from City Hall to assist
this guy." Id. at p. 3.
A meeting was scheduled for March 24, 2015, at which Morales was set to propose a new
agreement, in which Singh's obligation to make certain capital improvement was reduced from
$3 .1 million to $2 million. Immediately before the meeting, Ms. Cumberbatch received another
call from City Hall, encouraging her and Mr. Morales to come to an accommodation with Mr.
Singh.
49
When Morales set forth the revised proposal to Singh and his counsel, they stood up and
walked out of the room, dissatisfied with the offer. According to Morales, Singh's attorney
stated: "This is not good. I guess you didn't get the memo from city hall." Id. at p. 8.
Thereafter, Morales was pulled from the negotiations, and "the talks were moved from
the DACS office to City Hall, where they were put in the hands of the mayor's top political aide,
Emma Wolfe, the director of intergovernmental affairs." Under Ms. Wolfe's direction the
proposed settlement with Mr. Singh was further amended to reduce Singh' s capital improvement
obligation to $1.5 million - a net benefit of $1.6 million. However, before the agreement could
be finalized, Mr. Singh was arrested. Id. at p. 9.
Based upon the foregoing, it is clear that: (a) Singh made significant financial
contributions to Mayor de Blasio; (b) that in return, he asked the Mayor to undertake official acts
which were worth millions of dollars to Singh; and (c) that multiple city employees would testify
that they were "pressured" by Mayor de Blasio to perform such official acts.
This, of course, is precisely what is alleged in the instant Indictment. Indeed, it is
difficult to identify any basis to distinguish the two fact patterns - other than the fact that Mayor
de Blasio, unlike Messrs. Venditto and Mangano, is a member of the Democratic Party.
Accordingly, the well publicized events surrounding the Singh - de Blasio dealings, and
the Government's decision not to prosecute Mr. de Blasio under these circumstances, constitutes
evidence that other, similarly situated persons were not targeted by the Government.
C. The Court Should Dismiss Indictment or Order Discovery
In light of the foregoing, Mr. Mangano is respectfully moving to dismiss the Indictment.
In the alternative, he is requesting the following discovery in connection with his selective
prosecution claim:
50
To the extent that the decision to bring charges against Messrs. Mangano and
Venditto was made or authorized by personnel in the Department of Justice ("DOJ"),
outside of the United States Attorney's Office for the Eastern District of New York, the
DOJ should identify all personnel involved in that decision.
All involved personnel from both the Department of Justice and the United States
Attorney's Office should be compelled to disclose and report any communications -
verbal or written - with any persons outside of their respective offices encouraging,
directing or pressuring such personnel to bring charges against Messrs. Mangano and
Venditto, or inquiring into the status or timing of such charges.
Involved personnel within the Department of Justice and the United States
Attorney's Office should be compelled to disclose and report any communications -
verbal or written - with any persons inside or outside of their respective offices,
encouraging, directing or pressuring the personnel to bring charges against Messrs.
Mangano and Venditto prior to November 2016.
The Department of Justice and the United States Attorney's Office should be
compelled to produce any communications, memorandum and documents in their
possession relating to the timing of the instant Indictment, the need to submit this matter
to a Grand Jury prior to November 2016, the applicability or non-applicability of any
DOJ policy relating to election year sensitivities, the Hatch Act, and/or the possible
impact of the instant Indictment upon the 2016 election.
The Department of Justice and the United States Attorney's Office should be
compelled to produce any communications, memorandum or documents which
recommended, advised, or cautioned against bringing the instant Indictment against
Messrs. Mangano and Venditto;
., The Department of Justice and the United States Attorney's Office should be
compelled to produce any communications, memorandum or documents comparing the
strength of the allegations against Messrs. Mangano and Venditto with those against
Mayor Bill de Blasio;
The Court should so-order a subpoena, to be served upon Jay Jacobs, directing
Mr. Jacobs to produce: (1) any and all records of communications with any persons, prior
to October 18, 2016, which relate in any way to the prospect of criminal charges against
Messrs. Mangano and Venditto; (2) any and all records of communications, on any date,
discussing, concerning, or relating to efforts by Mr. Jacobs or William Clinton to
encourage or secure criminal charges against Messrs. Mangano and Venditto.
The Court should so-order a subpoena, to be served upon William Clinton,

directing Mr. Clinton to produce: (1) any and all records of communications with any
persons, prior to October 18, 2016, which relate in any way to the prospect of criminal
charges against Messrs. Mangano and Venditto; (2) any and all records of
communications, on any date, discussing, concerning, or relating to efforts by Mr. Jacobs
51
or Mr. Clinton to encourage or secure criminal charges against Messrs. Mangano and
Venditto.
IX. MOTION FOR BILL OF PARTICULARS
"The principles governing requests for a bill of particulars are well settled. A bill of
particulars is appropriate to pennit a defendant to identify with sufficient particularity the nature
of the charge pending against him, thereby enabling defendant to prepare for trial, to prevent
surprise, and to interpose a plea of double jeopardy should he be prosecuted a second time for the
same offense." United States v. Davidoff, 845 F.2d 1151, 1154 (2d Cir. 1988) (district court
abused discretion in refusing to grant particulars), citing United States v. Bortnovsky, 820 F.2d
572, 574 (2d Cir. 1987).
In the instant case, the Indictment describes, in extremely general terms, the purported
benefits conferred upon Harendra Singh by the Defendants. Moreover, the Government has
sought to provide itself significant wiggle room to allege different or additional benefits at trial.
Hence, Paragraph 11 of the Indictment provides that: "[a]moung other things" Messrs.
Mangano and Venditto authorized an unspecified number of amendments to the Oyster Bay
concession agreements relating to "Restaurants #3 and #4", on unspecified dates, over a two year
period.
Likewise Paragraph 12 alleges that Mr. Mangano awarded unspecified entities controlled
by Singh with "lucrative contracts by Nassau County, including but not limited to certain
contracts worth hundreds of thousands of dollars to provide food services ... "
On the flip side, the Indictment, while listing a number of benefits obtained by Mr.
Mangano, is careful to assert that the evidence is "not limited to" such enumerated items. See
Indictment ,I 13.
52
In order to avoid undue and unfair surprise at trial, the Government should be required to
provide a bill of particulars with respect to the respective benefits conferred upon Mr. Singh
and/or Mr. Mangano as part of any alleged quid pro quo. Such particulars are especially
important in light of the duplicitous structure of the indictment, and the myriad legal issues
surrounding Mangano's purported liability for transactions talcing place in Oyster Bay, the rouge
and fraudulent Fred Mei amendments, and whether the 9overnment has adequately alleged an
"official act" under the standards set forth by McDonnell.
Moreover, the Government should be compelled to specifically describe the alleged
benefits conferred upon Mr. Mangano so that counsel has opportunity, prior to trial, to compile
documentary evidence (such as receipts) which would rebut the Government's allegations.
Indeed, under similar circumstances, this Court has compelled the Government to provide
particulars as to the specific quid pro quo underlying an alleged bribery scheme. See United
States v. Aliperti, 867 F.Supp. 142, 149 (E.D.N.Y. 1994) ("Because the Government will be
required to prove at trial that Defendants obtained payments to which they were not entitled,
knowing that the payments were made in return for official acts . . . the Court finds that
Defendants are entitled to some particularization in this regard, in order to adequately prepare a
defense and to avoid unfair surprise at trial."); see also United States v. Ganim, 225 F.Supp.2d
145, 148, 155 (D. Conn. 2002) (ordering bill of particulars regarding benefits obtained in bribery
case).
Accordingly, we are respectfully requesting the following particulars:
With respect to Count 1, the Government should be compelled to specify each and
every transaction, involving any thing of value of $5,000 or more, which the Government
will seek to introduce at trial as evidence in furtherance of Count 1. To the extent that the
Government is relying upon a specific contract or amendment, it should identify such
document by date, and should also identify the parties thereto.
53
In addition, the Government should also be compelled to specify all "things of

value" which Mr. Mangano allegedly accepted, "intending to be influenced and
rewarded."
every transaction, involving any thing of value of $5,000 or more, which the Government
will seek to introduce at trial as evidence in furtherance of Count 2. To the extent that the
In addition, the Government should also be compelled to specify all "things of

value" which Mr. Mangano allegedly accepted, "intending to be influenced and
rewarded."
every "official act" performed by the respective Defendants, which the Government will
seek to introduce at trial as evidence in furtherance of Count 3. To the extent that the
In addition, the Government should also be compelled to specify anything of

value which Mr. Mangano received or accepted, which the Government alleges to be a
bribe or a kickback.
every "official act" performed by the respective Defendants, which the Government will
seek to introduce at trial as evidence in furtherance of Count 4. To the extent that the

every "official act" performed by the Defendant, which the Government will seek to
introduce at trial as evidence in furtherance of Count 5. To the extent that the

every "official act" performed by the Defendant, which the Government will seek to
54
introduce at trial as evidence in furtherance of Count 6. To the extent that the


value which Mr. Mangano allegedly obtained or accepted under "color of official right."
X. THE GOVERNMENT SHOULD BE COMPELLED TO

PRODUCE ALL BRADY MATERIAL IN ITS POSSESSION
Finally, we would respectfully ask the Court to direct the Government to produce all
Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963) material, including that
falling under Giglio v. United States, 405 U.S. 150, 92 S. Ct. 763, 31 L. Ed. 2d 104 (1972), at
least 60 days prior to trial.
In the instant matter, that specifically includes: (a) any information tending to show that
the 2011/2012 Oyster Bay concession amendments were ultra vires acts orchestrated by
Frederick Mei; (b) any information obtained from any employee of either the Town of Oyster
Bay or Nassau County who has denied being pressured by Messrs. Venditto and/or Mangano
with respect to any business pending before such governments; (c) any self-contradictory
statements made by Mr. Singh in which he denied that benefits conferred upon Mr. Mangano
were in exchange for, or a reward for, official actions undertaken by Mr. Mangano; and (d) the
disclosure of any communications between the Government and Singh's counsel (written or
verbal) in which the Government stated or suggested that its position vis-a-vis Mr. Singh's
release on bond was conditioned, or connected in any way, with his willingness to cooperate in
the instant case.
55
CONCLUSION
Based upon the foregoing, we are respectfully asking the Court to enter an order: (1)
dismissing duplicative counts of the Indictment; (2) dismissing the Federal Program Bribery
counts, to the extent that they charge Mr. Mangano in connection with transactions in the Town
of Oyster Bay; (3) dismissing the Honest Services Wire Fraud counts, to the extent that they
charge Mr. Mangano with depriving the Town of Oyster Bay of its right to honest services; (4)
dismissing Honest Services and Hobbs Act Extortion Counts, for their failure to adequately
allege that Mr. Mangano performed "an official act" within the Town of Oyster Bay; (5)
precluding the Government from proceeding under a theory that ultra vires actions undertaken
by Frederick Mei constituted "official acts" within the meaning of McDonnell; (6) ordering the
partial disclosure of grand jury minutes; (7) severing the trials of Messrs. Mangano and Venditto;
(8) dismissing the Indictment, or ordering discovery, based upon evidence of selective
prosecution; (9) compelling the Government to produce a bill of particulars; and {10) compelling
the Government to produce Brady material.
Dated: Garden City, New York

August 25, 2017 ,
Respectfully submitted,
By: Isl Kevin J. Keating

(516) 222-1099
On the Brief: Matthew W. Brissenden, Esq.
56
0: Clerk's Office .
FILE! D
IN CL.ERK'S 0Ffil0.
APPLICATION FOR LEAVE U.S. C,ISi~lef COURT E]).N.V,
TO FILE DOCUMENT UNDER SEAL
********************************
* AUG 28 2017 A) If pursuant to a prior Court Order:
LONG ISLAND OFFIC~~:~:::;eo~~~:_m_w_hi-ch_E_n_te_11_ed_=-=_-=_-=.-=_=========

ugA
Date Entered:
----------- ------
-v.- I G - c ,- S '-I 0
Docket Number
d t.,vcu-d N)ctl) CjQOO ef"-'
*****************t!.!9********** =====================B)
If a !!m application, the statute, regulation, or other legal basis that
SUBMITTED BY: Plaintiff__ Defendant , / DOJ authorizes filing under seal
ame: kc:v{o Kc:c:, t,~r E:cz~
inn_ Name: _J ' /,,,
ddress:
----------- -----
ORDERED SEALED AND PLACED IN THE CLERK'S OFFICE,
AND MAY NOT BE UNSEALED UNLESS ORDERED BY
THE COURT.
ICATE UPON THE PUBLIC DOCKET SHEET: S NO
ryes, state description of document to be entered on docket sheet:
RECEIVED IN CLERK'S OFFICE_ _ _ _ _ _ _ __

DATE
ANDATORY CERTIFICATION OF SERVICE:
.) _ A copy of this application either has been or will be promptly served upon all parties to this action, B.) _ Service is excused by 31 U.S.C. 3730(b), or
y the following other statute or regulation:_ _; or C.) __This is a criminal document submitted, and flight public safety, or security are significant
oncems. (Check one)
DATE SIGNATURE

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Case 2:16-cr-00540-JMA-SIL Document 80 Filed 08/28/17 Page 1 of 255 PageID #: 1642

UNITED STATES DISTRICT COURT FILED

all material pursuant to Brady v. Maryland, 83 S Ct. 1194 (1963).

Dated: August 25, 2017

To: Clerk of the Court

UNITED STATES DISTRICT COURT

EDWARD MANGANO, AFFIRMATION

hereby affirms the following under the penalties of perjury:

am submitting this affirmation in further support of Mr. Mangano's omnibus motion.

2017, under index number 606132/2017.

4. Attached hereto as Exhibit C is a true and correct copy of the purported

Venditto nor duly approved by the Oyster Bay Town Board.

nor duly approved by the Oyster Bay Town Board.

extended loans to SRB in 2011 and 2012.

valid, binding agreement with the Town of Oyster Bay.

County Correctional Facility with bread.

April 25, 2017.

12. Attached hereto as Exhibit K is a March 9, 2012 Department of Justice

Memorandum entitled "Election Year Sensitivities".

Dated: Garden City, New York

By: Isl Kevin J. Keating

'( NYSCEF DOC. NO. 2 RK 06 /2 6/ 20 17 05 :1 8

SUPREME COURT OF THE

TOWN OF OYSTER BAY,

Plaintiff, Index No. _ _ _ __

Plaintiff Town of Oyster Bay

2. Starting in 2000, Singh and his companies were

Board. Mei was paid handsomely by

5. Singh was also aided by his long-tim

7. Singh 's schem e came crashing down around him

8. By this action, the Town seeks to ensure that it is

claims for: (xvi) implied indemnification, and (xvii) contribution.

9. Plaintiff the Town of Oyster Bay is a municipal corporation and incorporated

Town located in Nassau County, New York.

company with offices in New York, New Jersey and

Jurisdiction and Venue

20. This Court has jurisdiction over the Defendants unde

22. The Town owns a number of public beaches, parks

resolutions are discussed and voted on at publ

A. Woodlands Golf Course Concession Agreemen

B. TOBAY Beach Concession Agreements

29. Around the same time as the 2005 Woodlands Amendme

31. In September 2008, the Town and SRB Concession amen

Agreement for twenty years in return for

35. By the Spring of 2010, working with the Town's outsid

concession agreement by the Tow n after

38. SRB Concession then entered into a finan

39. Finally, Mei executed a letter opining that

IV. Unable To Borrow Additional Funds Law

40. At the same time that the Town entered into

42. A key obstacle to Singh 's ability to obtain further financ

experts, Garry and Harris Bea ch knew that

46. On September 16, 2010, just days after Harr

47. The next day, in an apparent attempt

48. Days later, on Sept emb er 23, 2010, Singh rewa

50. Nonetheless, in the months that followed

various lenders in the hope of securing additional funds for

V. Emboldened, Mei And Singh Continue the Conspiracy

Million Loan From Phoenix To SRB Catering

55. Throughout the summ er of 2011, Mei and Singh actively

56. Phoenix is a sophisticated market participant with hundr

57. By the fall of 2011, Phoenix had agreed to lend Singh

Oyster Bay. Apparently determined to please Singh -and thereby