Poughkeepsie Journal
Saturday, December 14, 2002
The amended suit might mean former town board members named as defendants could have legal fees paid for the by the town's insurance carrier. Officials said language in the amended suit implies negligence on the part of former board members, rather than a criminal act, which could change the insurance carrier's position.
The carrier has so far denied coverage to the former members, who have filed suit asking Hartford Financial Services Group cover expenses. That case is set for a preliminary hearing Thursday before state Supreme Court Judge Mark Dillon in Poughkeepsie.
Money allegedly vanished
Officials also say the previous owners transferred $1.6 million out of their bank account to an undisclosed location after the closing.
It was unclear where the $1.6 million allegedly transferred by former building owners Tho-mas and Betty Espie eventually ended up. The relevance of the allegedly missing money to the suit was also unclear.
Former town Supervisor Thomas Murphy, a defendant in the town's civil suit, said he believes Hartford eventually will decide to cover the former board members' legal costs.
''I'm hoping they will meet their responsibilities,'' Murphy said.
Former town attorneys Patrick Moore and Frank Redl will have their defenses paid for by Hartford, although the company would not pay any damages to the town should it win its case.
Federal Judge Charles L. Brieant has set Sept. 15 as the next conference in the town's civil case. Between now and then, lawyers for the town and the more than 20 defendants will go through discovery, where evidence is exchanged, and begin depositions.
A trial could start sometime next fall.
The town board this year filed the original suit, which alleged the $6.95 million purchase was part of a larger scheme hatched by former town and Dutchess County GOP Chairman William Paroli Sr. and others to defraud taxpayers. The suit claims the town board in office then backed the scheme and that bribes and other illegal acts falsely inflated the price of the building, purchased from the Espies. Repairs and other problems at the facility have since hiked the price to $7.5 million.
Betty Espie again denied any wrongdoing on the couple's part.
''I don't think anybody did anything wrong. I think it's political,'' she said of the suit.
David Kunz, an Albany attorney whose firm represents the town, did not return calls seeking comment.
The amended suit alleges town board members were negligent in the transaction, a legal definition that could allow them to gain insurance coverage from Hartford.
Town Attorney Thomas Mahar confirmed the amended suit and Supervisor Joseph Davis said he expects the town board to be updated on the case Wednesday during its meeting at town hall.
The civil suit follows a four-year state and federal probe into town corruption, much of which focused on the sale of the Tucker Drive property. Paroli and four former town employees were convicted on graft-related charges. Paroli pleaded guilty to a single count, although that count did not relate to the police/court facility purchase.
No elected officials or the Espies were ever charged.
The town's suit has sparked divergent reactions about the purchase and could lead to an extended court battle. Supporters say it could help recoup money the town believes it was swindled out of.
Others believe the suit could end up costing the town hundreds of thousands of dollars and may not end in victory.
Moore and Redl were accused in the original suit of helping the town create a ''sham'' lease with the former owners of the property, part of a larger scheme to falsely inflate the building's price. The suit claims the scheme was hatched by Paroli and approved by the former all-Republican town board during an illegal meeting at Paroli's home.
Town officials in office at the time of the sale have said the increase was needed to cover extra costs to rehabilitate the building and an increased acreage with the sale.
The suit also claims officials violated the federal RICO law, or Racketeer Influenced and Corrupt Organizations Act. The law is usually used to prosecute organized crime figures. Several defense attorneys have since said they plan to challenge that aspect of the case.
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