And on 01/20/2012 it came back:
The total funds received by the Town are
$1,902,477.00 and have been distributed
to the taxing jurisdiction impacted as follows:
Town of Greece General Fund $ 292,277.82
Town of Greece Lighting Fund $ 12,185.76
County of Monroe $ 368,524.40
Greece Central School District $1,081,648.91
Ridge Road Fire District $ 147,840.11
A representative from Greece told me the money is
going into a trust fund. She said it would cost
too much to refund the tax payers - - -
(June 22, 2005)
Former assessor is indicted in conspiracy and bribery scandal
Gary Craig, Steve Orr and Ben Rand
Staff writers Democrat and Chronicle
— Greece taxpayers were defrauded out of millions of dollars of tax revenue
by a conspiracy to illegally lower Eastman Kodak's tax assessment in the town,
federal prosecutors charged Tuesday.
In a dramatic escalation of what had been a corporate kickback scandal,
prosecutors Tuesday accused former Greece assessor Charles A. Schwab of
a host of offenses, including accepting bribes to lower Kodak's tax bill.
The scheme corrupted Greece's assessment system, victimizing taxpayers
in Monroe County's largest town, according to a sweeping 28-page criminal complaint.
"The other taxpayers in Greece have been required to make up the savings
Kodak received from Kodak Park's tax assessment reduction either in an
increase in taxes or a reduction in services," the complaint alleges.
Prosecutors say they have not calculated the actual impact on Greece residents.
"How it actually affected each taxpayer, that's something we don't know,"
said Assistant U.S. Attorney Richard Resnick.
Kodak could have saved roughly $8 million to $9 million in property tax
payments over the last three years under two assessment deals that prosecutors
say were part of the illegal conspiracy, Democrat and Chronicle calculations show.
Nearly two-thirds of the money would have been paid to the
Greece Central School District; the balance would have gone to ease
town and Monroe County property taxes.
Greece officials say they plan to discuss remedies with Kodak, should
it turn out that the company's properties were illegally devalued.
But Kodak contends its properties were assessed accurately.
"We have no indications that our historical tax assessments were inappropriate,"
said Kodak spokesman David Lanzillo. He said Kodak and Greece are maintaining
an "open line of communication."
Prosecutors in May accused two men — Yates County appraiser John E. Nicolo, 72,
and former Eastman Kodak Co. real estate executive Mark S. Camarata, 42 — of a
kickback scheme. Authorities alleged that Camarata hired Nicolo on behalf of Kodak,
and paid inflated costs for Nicolo's appraisals. Nicolo then funneled some of the
money back to Camarata, authorities alleged.
Both Nicolo and Camarata are charged with money-laundering and mail fraud.
Schwab, a 58-year-old Victor resident, is accused of conspiring with
Nicolo and Camarata to defraud Greece residents and Kodak. He faces
bribery, conspiracy, money-laundering and mail fraud charges, which
have a cumulative maximum prison penalty of 30 years, according to Resnick.
Schwab is scheduled to appear in federal court Thursday.
On its face, the criminal complaint challenges the integrity of property
assessments throughout Greece because of the allegations that the assessor
could be bought.
Greece Supervisor John Auberger said he was disappointed about the
allegations that Greece's former town assessor violated the public trust.
"The town and the taxpayers have been victimized," he said.
"Now we have to go back and untangle the mess that it appears
someone else created."
Beyond that, the charges raise questions about the oversight
within Kodak's corporate tax division, where Camarata worked.
But the allegations outlined in the criminal complaint reach
even more broadly.
For instance, prosecutors allege:
ITT Industries Inc. and Rochester Gas and Electric Corp. were
also victimized by criminal conspiracies. Schwab actually jacked
up ITT's assessment on a Greece property so Camarata could then
convince the company of the need to hire Nicolo as an appraiser to
challenge the town's assessed value, the complaint alleges.
Richard Ackerman, a former Yates County undersheriff who now works
as an appraiser, received inflated contracts for Kodak and RG&E
appraisal work and then made payments to various companies owned
in part by Schwab. (Schwab, Greece's assessor from 1991 until 2004,
also worked as an independent appraiser.)
Ackerman, who previously worked with Nicolo, has not been criminally
charged. Ackerman refused to comment.
One of the companies receiving payments from Ackerman was Lakeshore Appraisals,
which was co-owned by Schwab and an RG&E employee who is not named in the complaint.
The RG&E worker and Schwab split the kickback proceeds from the Ackerman contracts,
the complaint states.
Federal investigators from the FBI, the Internal Revenue Service and the
U.S. Postal Inspection Service are working with Greece police in the probe.
FBI spokesman Paul Moskal said investigators were reaching out to residents
and business people who may have knowledge about the plot alleged in the
criminal complaint. "People can share that information with us on a confidential basis,"
"The FBI's committed, as are the other law enforcement agencies,
to root out corruption at any level," Moskal said.
A history outlined
Prosecutors allege that the kickback scheme between Nicolo and Camarata
may have started in late 1999, when Nicolo paid Camarata $5,000.
With each Kodak appraisal contract he received, Nicolo would pay
"a portion of his fee to Camarata, generally one-half, or if Schwab was involved ...
generally one-third," the complaint alleges. John Reed, Nicolo's
Pennsylvania-based lawyer, would not comment Tuesday. He said he
has yet to read the complaint against Schwab.
The complaint outlines a scheme that prosecutors allege provided
millions of dollars in bribes and kickbacks for the conspirators.
A company established by Schwab, IAC Corp., got almost $1.6 million
from Nicolo, authorities allege. Nicolo also paid nearly $3.5 million
in kickbacks to a dummy company, Strategic Asset Management, created
by Camarata, prosecutors allege.
In 2000, Kodak and Greece agreed to a six-year pact that significantly
reduced Kodak's assessments. Kodak used Nicolo as its appraiser to value
the company's Greece property. The contract with Nicolo was a standard
"flat or hourly" fee agreement, the criminal complaint states.
In January 2001, Nicolo received $150,000 as part of his payment,
then paid Schwab $44,477, authorities allege.
But, as the Democrat and Chronicle reported last week, Schwab scrapped
that pact two years later and drafted a new one that lowered Kodak's
assessments property values by tens of millions of dollars more.
And Schwab in 2004 agreed to accelerate Kodak's lower assessments for
the years 2004, 2005, and 2006, the complaint alleges.
The federal criminal complaint alleges that the 2002 pact was
engineered by Camarata, Nicolo and Schwab as part of the conspiracy.
Camarata was able to award a "performance fee contract" to Nicolo
that ensured the trio would receive much more in illicit rewards,
"The scheme ... escalated when it was decided that Nicolo would be
hired under a performance-fee contract, rather than a flat or hourly
fee contract," the complaint says. "This contract provided that
Nicolo would only be paid if Kodak Park's tax assessment was reduced by Schwab."
Such contingency-based contracts typically violate appraisal standards
because they could encourage appraisers to value property based on their
possible financial returns.
"You can't have contingent fees," said Gary Taylor, former president
of the international appraisers organization, the Appraisal Institute.
"The only time you can do that as an appraiser is if you are acting
as a consultant and not doing the appraisal reports."
The criminal complaint points to Camarata as the Kodak person in
charge of drafting the contracts. Camarata's attorney, Lawrence Kasperek,
would not answer questions about the contracts or the allegations
against his client. And Resnick would not say whether other Kodak
officials approved contingency-based contracts with Nicolo.
Kodak also would not answer questions about the contracts.
With the 2002 agreement Schwab knew "that the greater the tax assessment
reduction, the more money he, Nicolo and Camarata would make under the scheme,"
the complaint states.
The contract between Nicolo and Kodak stated that "the parties recognize
that there will be difficulties in obtaining additional assessment reductions
because of past agreements still in effect," according to the complaint.
Schwab, however, sliced Kodak's value. That pact reduced Kodak's value in
Greece by a total of $65.8 million more than the earlier agreement for
the years 2003, 2004 and 2005, the complaint alleges.
Responding to the allegations Tuesday, Kodak said in a statement that
it has regular discussions with Greece on a variety of matters, "and
any new information that we receive as a result of this investigation
will be part of those discussions."
The assessment matter comes about two months after Kodak completed a
regulatory review that uncovered weaknesses in the company's income
tax and pension accounting practices worldwide. As a result of that
review, Kodak committed to a range of reforms, including new supervision and training.
The company said the income tax and assessment cases are not connected
in any way. The assessment case, in particular, is "not material"
to Kodak's finances, the company said.
A longtime Kodak observer said he does not believe the two cases
suggest a problem with Kodak's financial controls.
The amounts involved "don't amount to a hill of beans" in a $13 billion company,
said Ulysses Yannas, broker with Buckman, Buckman and Reid in New York.
What the cases show is "that in big companies, it is impossible to keep
an eye on everyone," Yannas said.
According to federal investigators, Kodak was the first to suspect a
kickback plot and much of its internal investigation provided the
information that led to Camarata's arrest.
Rochester lawyer John Parrinello, who represents Schwab, said many
manufacturing properties have secured lowered assessments through
challenges, so the 2002 pact may well have been an honest account
of the worth of Kodak's Greece property.
"If you go to every town that has industrial taxpayers, you will not
find it strange, particularly in these times, that those facilities
go back to the towns" for assessment reductions, Parrinello said.
Plus, he said, Greece officials other than Schwab must have known
of the reduced assessments and there was no outcry or suspicions raised in 2002.
"It seems to me that Mr. Schwab, with respect to Kodak and the
town of Greece, would not go off by himself and make the changes
they're claiming he made in a vacuum," Parrinello said.
Greece officials have said that the assessor had largely unfettered
control of assessments since laws try to prohibit intervention by
elected officials. Auberger said Tuesday that he wants to push for
reforms "to establish new guidelines for the assessment process
that will prevent one person from having so much control over
a process that affects so many people."
Nicolo's contract with Kodak for the 2002 reassessment initially
called for him to receive 25 percent of Kodak's tax savings over
the 15-year duration of the assessment agreement, the complaint states.
But in September 2004, Kodak amended the contract so it did not
have to pay him over the full 15 years.
Nicolo has already received about $3.9 million under the updated
contract, and split the money with Schwab and Camarata, authorities allege.
They say that he also was slated to receive another $3 million under
the updated Kodak contract.
Parrinello said he is sorting out the payments from Nicolo to Schwab.
He said he is talking with Nicolo's lawyer to determine the reason for
the payments. Nicolo had contracted Schwab as an independent appraiser before.
"The government has to show that those payments were bribes," Parrinello said.
What's clear from the criminal complaint is that the scandal is swelling
in scope, encompassing more companies and more individuals.
Asked about the path of the probe, Resnick would only say,
"We'll see where the investigation goes."
For over 21 years, property taxes always went up for the Greece residents
and small businesses in Greece.
Recently, their assessments went up too.
Jane Flasch WHAM TV (Greece, NY) 06/21/05 --
According to the FBI, while Charles Schwab was the Greece Town Assessor,
he took bribes to lower property assessments for Eastman Kodak Company
in a scheme involving former Kodak employee Mark Camarata.
For over 21 years, property taxes always went up for the Ritondales who
live in Greece. Recently, their assessments went up too.
Angie Ritondale said, "It hurts...we just barely make ends meet."
But for Kodak, over the same time period, assessments were lowered
drastically and now allegedly illegally.
According to court papers, Greece already had a legitimate six-year
agreement to lower Kodak's assessment. The agreement was non changeable
by any party. However, Schwab allegedly threw it out for a series of new
deals that lowered Kodak's assessment by $65.8 million.
Prosecutors allege that Schwab was working with Camarata, a former
Kodak real estate agent whom the company later employed as a consultant.
Camarata received $4 million in bonuses and kickbacks from this deal alone.
The money was allegedly laundered through private companies set up by
Yates County appraiser John Nicolo.
The alleged scheme did not end there. Prosecutors say Schwab tried
to influence the Gates Town assessor to lower assessments at the
former Kodak Park and for Heidelberg Digital, but it didn't work.
Prosecutors say Schwab was also working on similar deals to lower
assessments at several RG&E properties, Eastman Savings and Loan,
and other holdings.
It is alleged that he was paid bribes of $1.5 million.
During a raid, the FBI found hand written documents promising someone
with the initials “CS” another million dollars in bribes, money out of
Ritondale said, "It's awful. I think he should be punished for it."
While it's believed none of the companies--including Kodak and RG&E--
were involved in the schemes, prosecutors questioned Kodak's oversight
and noted that the company should have realized that the assessments
Camarata was negotiating were too good to be true.
Howevet, Kodak did first contact the FBI after receiving a tip.
Schwab is charged with taking bribes, money laundering, and mail fraud.
It does not appear that other public officials were involved; however,
the investigation is continuing. Another Yates County appraiser has been
named in court documents, but he has not been charged.