Court dismisses last Oyster Bay loan guarantee lawsuit
It was all a fake-out.
Taxpayers footed the bill for two lengthy federal trials centered on $20 million in alleged loan guarantees made by Oyster Bay Town to former concessionaire Harendra Singh.
Former Nassau County Executive Edward Mangano was found guilty of accepting favors from Singh to help him secure the loan guarantees. Mangano and his wife, Linda, who was convicted on related charges, are appealing their convictions.
The late Oyster Bay Supervisor John Venditto was nearly bankrupted fighting corruption charges centered on the loan guarantees. He was acquitted of wrongdoing.
Now it turns out there were no loan guarantees. No legal loan guarantees. No enforceable loan guarantees.
A state appellate court today threw out the last of three lawsuits brought by lenders trying to get Oyster Bay to make good on $20 million in bad loans they made to Singh over the years.
A four-judge panel of the state Appellate Division Second Judicial Department unanimously decided to dismiss a suit by Phoenix Life Insurance Company attempting to recoup $12 million from Oyster Bay.
Like two appellate courts before them, the panel said the loan guarantees were unenforceable because they were not approved by the town board.
The court noted that Phoenix had been unwilling to lend Singh $12 million for concession improvements because Singh had no collateral to secure the loan.
To convince Phoenix to make the loan, former Town Attorney Len Genova signed papers attesting to the town's obligation to repay if Singh defaulted. Deputy Town Attorney Fred Mei and the law firm of Harris Beach issued opinion letters saying the loan guarantee "was a valid and binding obligation upon the town."
But the appellate panel, citing the same long history of New York legal cases used by the two previous appellate courts, said a town contract is not binding if not approved by the town board. Moreover, it said, the town incurs no financial obligations when there is no approved contract.
Phoenix provided no evidence of a town-board approved contract agreeing to repay the $12 million loan, the court said.
Although Harris Beach said it represented Oyster Bay in opinion letters to all the lenders, the town board never approved hiring the law firm. Instead, Mei brought in Harris Beach, which was representing Singh at the time, and unilaterally waived any conflict of interest.
Taxpayers footed the bill for two lengthy federal trials centered on $20 million in alleged loan guarantees made by Oyster Bay Town to former concessionaire Harendra Singh.
Former Nassau County Executive Edward Mangano was found guilty of accepting favors from Singh to help him secure the loan guarantees. Mangano and his wife, Linda, who was convicted on related charges, are appealing their convictions.
The late Oyster Bay Supervisor John Venditto was nearly bankrupted fighting corruption charges centered on the loan guarantees. He was acquitted of wrongdoing.
Now it turns out there were no loan guarantees. No legal loan guarantees. No enforceable loan guarantees.
A state appellate court today threw out the last of three lawsuits brought by lenders trying to get Oyster Bay to make good on $20 million in bad loans they made to Singh over the years.
A four-judge panel of the state Appellate Division Second Judicial Department unanimously decided to dismiss a suit by Phoenix Life Insurance Company attempting to recoup $12 million from Oyster Bay.
Like two appellate courts before them, the panel said the loan guarantees were unenforceable because they were not approved by the town board.
The court noted that Phoenix had been unwilling to lend Singh $12 million for concession improvements because Singh had no collateral to secure the loan.
To convince Phoenix to make the loan, former Town Attorney Len Genova signed papers attesting to the town's obligation to repay if Singh defaulted. Deputy Town Attorney Fred Mei and the law firm of Harris Beach issued opinion letters saying the loan guarantee "was a valid and binding obligation upon the town."
But the appellate panel, citing the same long history of New York legal cases used by the two previous appellate courts, said a town contract is not binding if not approved by the town board. Moreover, it said, the town incurs no financial obligations when there is no approved contract.
Phoenix provided no evidence of a town-board approved contract agreeing to repay the $12 million loan, the court said.
Although Harris Beach said it represented Oyster Bay in opinion letters to all the lenders, the town board never approved hiring the law firm. Instead, Mei brought in Harris Beach, which was representing Singh at the time, and unilaterally waived any conflict of interest.
In
July 2019, the U.S. Court of Appeals for the Second Circuit affirmed a lower
court decision, dismissing PHL Variable Insurance Co.'s lawsuit against
Oyster Bay Town. PHL was seeking to recoup more than $6 million after
Singh stopped payment on an $8 million loan allegedly guaranteed by the
town.
Last September, the state
Appellate Division, Second Judicial Department, unanimously overturned a
lower court decision and dismissed a claim filed by Atalaya Asset
Income Fund against the town. after Singh stopped making payments on a
$1.8 million loan.
The
companies all say they relied on amended concession agreements, drawn up by Mei and signed by Genova, to make the loans to Singh. The agreements included
indirect loan guarantees, structured in a way to get around a state
constitutional bar against municipalities offering credit to private
entities.
Oyster Bay spokesman Brian Nevin said today in a statement, "Three courts have now recognized that all loans related to H. Singh were bogus, fraudulent, and entered into without any approvals from the Town of Oyster Bay. These court decisions are great news for taxpayers, who will not pay a single dime for H. Singh’s criminal scheme."
Oyster Bay spokesman Brian Nevin said today in a statement, "Three courts have now recognized that all loans related to H. Singh were bogus, fraudulent, and entered into without any approvals from the Town of Oyster Bay. These court decisions are great news for taxpayers, who will not pay a single dime for H. Singh’s criminal scheme."
No sentencing has been scheduled as yet for Singh, who pleaded in Oct. 2016 to
federal corruption charges, nor Mei, who secretly pleaded guilty in
Sept. 2015 to a charge of honest
services fraud.
Singh and Mei testified for the government.
Genova, who admitted taking bribes from Singh, testified for the government in return for immunity from federal prosecution.
Neither the Harris Beach law firm nor any of its attorneys were charged with any wrongdoing.
The only lawsuits still pending were filed by Oyster Bay: one against Singh, Mei, Harris Beach and two lenders, alleging a conspiracy to "misappropriate" taxpayer money through the fraudulent loan guarantees; the other against Genova, seeking to recover damages because of his "unlawful and wrongful acts" involving Singh and the loan guarantees.
Singh and Mei testified for the government.
Genova, who admitted taking bribes from Singh, testified for the government in return for immunity from federal prosecution.
Neither the Harris Beach law firm nor any of its attorneys were charged with any wrongdoing.
The only lawsuits still pending were filed by Oyster Bay: one against Singh, Mei, Harris Beach and two lenders, alleging a conspiracy to "misappropriate" taxpayer money through the fraudulent loan guarantees; the other against Genova, seeking to recover damages because of his "unlawful and wrongful acts" involving Singh and the loan guarantees.
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