Harris Beach: law firm was victim of OBay loan scam

The Harris Beach law firm last week sued former Nassau County Executive Ed Mangano and former Oyster Bay Town attorney Len Genova for damages, accusing them of participating in a "wide-ranging conspiracy" to defraud the firm by using it as a cover for obtaining millions of dollars in town-backed loans for then concessionaire Harendra Singh

Also last week, court papers indicate that Harris Beach agreed to private mediation over Oyster Bay's earlier lawsuit that alleges the law firm engaged in a conspiracy with Singh "to misappropriate millions of dollars" from the town and taxpayers through loan guarantees the firm knew were a "sham."

Oh what a tangled web....

It revolves around some $20 million in loans made to Singh from about 2010 through 2014 for concession improvements from three lenders who depended on assurances from town officials and Harris Beach that Oyster Bay would repay if Singh defaulted.

The promises were made despite a state constitution ban against municipalities providing credit to private vendors and even though the town board never approved concession amendments that allegedly obligated the town to repay the loans. 

The town contends the scheme was cooked up by Singh and then deputy town attorney Fred Mei, aided by Genova, Harris Beach, lenders and others.

But federal prosecutors alleged in two lengthy trials that Mangano and the late Oyster Bay Supervisor John Venditto, both elected Republicans, authorized the scheme in return for bribes and favors from Singh. 

Venditto was acquitted; Mangano was found guilty but is appealing. Mei and Singh pleaded guilty to corruption and testified for the prosecution. Neither has been sentenced.

Genova, who admitted taking bribes from Singh, was granted immunity in return for testimony against his boss and Mangano. Harris Beach was never charged with any wrongdoing.

Three appellate courts have found the loans were in fact shams: unenforceable because they were never approved by the town board. The federal appellate court also called the alleged guarantee for Oyster Bay to repay without recourse an "unfathomable obligation."

Harris Beach says it knew nothing about bribes and kickbacks when it offered opinion letters to lenders saying the town was obligated to repay.

"Not only are the town taxpayers victims of the Loan Scheme, Harris Beach, who is being sued for issuing legal opinions and falsely accused of being a participant in that Scheme, is also its victim, being forced to spend significant sums to defend the false claims against it and facing significant business disruptions," Harris Beach contended in a "third party summons and complaint" or countersuit last week.

"Genova is individually liable to Harris Beach for the damages Harris Beach has incurred and will continue to incur as a result of (Genova and Mangano's) misconduct in conspiring with Singh and Mei...and Venitto to conceive , execute and conceal the more than five-year Loan Scheme," Harris Beach says in its legal papers.

"Mangano is separately liable to Harris Beach for the damages it has incurred and will incur as a result of his misconduct in instructing Town officials Venditto, Genova and Mei to conspire with and aid Singh in planning and executing the Loan Scheme."

 

The firm asks the court to award compensatory and punitive damages in "amounts to be decided at trial." 

The lenders have said they relied on amended concession agreements, drawn up by Mei and signed by  Genova, to make the loans to Singh. When the lenders demanded an outside opinion as to the legality of the guarantees, Mei unilaterally hired Harris Beach.

Mei also unilaterally waived any conflict of interest for the firm, which represented Singh at the time.

Harris Beach told lenders in its opinion letters that it had been retained to represent Oyster Bay, though the town board never hired the firm nor paid it.

The firm says in its lawsuit "At no time did Venditto, Genova, Mei or anyone else in Town government inform Harris Beach or (member William) Garry that Mei lacked authority to appoint Harris Beach for the purpose of issuing opinion letters..or that Mei lacked authority" sign engagement letters.

Harris Beach also contends that Mei assured the firm it was indemnified by the town on at least two loans if lenders made any claims involving the opinions -- even though vendors usually indemnify the municipality for any mistakes they make, not the otherway around.

The law firm contends that Mei "at all times" was following the instructions of Venditto and Genova.  

No public records about the loan guarantees have shown any dealings between Mangano and Harris Beach.

Harris Beach is national law firm with a Long Island office that has well-known political connections. Member William Garry, who handled the Oyster Bay loan guarantees, is the brother of Tom Garry, another law firm member who is vice president of the Nassau Democratic party and headed Democrat County Executive Laura Curran's transition team. County Attorney Jared Kasschau is a former partner. Malverne Mayor Keith Corbett , who provided legal advice to the transition team for former Democratis Hempstead Supervisor Laura Gillen, is also a member. Congressman Tom Suozzi (D-Glen Cove) also worked as counsel to the firm before he was elected to congress.

Harris Beach hired former State Sen. Jack Martins after the Republican lost his challenge against Curran for county executive.

Only William Garry was identified in papers as dealing with Mei on the loan guarantees.

Meanwhile, Oyster Bay's outside law firm Quinn Emanuel in a letter to the court filed Friday said that parties in the town's lawsuit had agreed to private mediation and would inform the court about the prospects of a  "consensual resolution."