Frederick Ippolito, Oyster Bay’s then-planning and development commissioner, negotiated with a contractor’s family on behalf of the town at the same time that he was accepting money from the contractor’s family trust, court and town documents show.

Ippolito reported to Oyster Bay’s ethics board that he received income from Carlo Lizza & Sons Paving Inc. which had millions of dollars of contracts with the town, and from the Lizza Family Trust, according to federal prosecutors. But that information was not reviewed by the ethics board, nor was it made available to the town board.

As commissioner, Ippolito negotiated the rezoning of property on West John Street in Hicksville owned by the Lizzas and the related purchase by the town of a nearby parcel at 50 Engel St., also owned by the Lizzas. During that time — from 2008 to 2013 — Ippolito received $2 million in consulting fees from Carlo Lizza & Sons Paving and a Lizza family member, according to prosecutors. The zoning change would have allowed development of a senior housing project to be called Cantiague Commons.

Oyster Bay Councilman Anthony Macagnone, who voted to approve the land purchase and zoning change in 2012, said in an interview that he did not know of Ippolito’s financial arrangements with the Lizzas at the time of the land and zoning negotiations.

“It should have been disclosed,” Macagnone said.

Ippolito had worked for the town in the 1970s and 1980s and then went to jobs in the private sector, including working for Carlo Lizza & Sons Paving Inc. in Hicksville before returning to work for Oyster Bay in 2009 as commissioner, according to a financial disclosure form he filed with the town.

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He held the job until he was forced out after his guilty plea in January to federal tax evasion charges for not reporting $2 million in consulting income from Lizza. Ippolito is scheduled to be sentenced in U.S. District Court in Central Islip on Aug. 23.

Ippolito’s work for the Lizzas is at issue in his federal tax evasion case. U.S. District Judge Leonard Wexler on July 13 delayed sentencing, saying he wanted answers about the money and the relationships among Lizza, Ippolito and the town.

The town ethics board delegates the task of reviewing financial disclosure forms to an appointee of the town attorney’s office, board chairman John Nagy said. That person is supposed to flag any item deserving the board’s attention, but that didn’t happen with Ippolito’s relationship with the Lizzas, Nagy said.

Town Attorney Leonard Genova, who became a member of the ethics board in 2012, said of the board not calling attention to the relationship: “Hindsight’s always 20/20.” Genova said he wasn’t sure which members of the Lizza family were involved in which transactions.

Town records show that during the years he was receiving payments from the Lizzas, Ippolito was negotiating with them on behalf of the town over the two Hicksville properties.

VIM Construction Co. owned 50 Engel St. and some of the parcels that were to become part of the Cantiague Commons project. The company was formed by senior members of the Lizza family and was headed by Carl Lizza Jr. until his death.

The Lizzas’ attorney, John Carman, said Elia Lizza, brother of the junior Lizza, has a financial interest in the company.

Elia Lizza heads the Carlo Lizza & Sons, which was founded by Carl Lizza Sr. and his son. Carman said the junior Lizza did not have a financial interest in Carlo Lizza & Sons at the time the town was considering the development and land sale. The paving company was based at 50 Engel St. until 2011 or 2012, Carman said.

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Ippolito’s attorney, Brian Griffin of Garden City-based Foley Griffin LLP, said in a statement that while working for the town, Ippolito “properly and lawfully disclosed the fact that he had a continuing personal and financial relationship with the Lizzas” and that he did not act improperly.

“Mr. Ippolito never received any compensation from the Lizzas in connection with any zoning work regarding Cantiague Commons or 50 Engel Street,” Griffin said. “All of Mr. Ippolito’s efforts in connection with this project were done for the town, at the town’s behest and in an open and obvious fashion.”

Griffin said that the rezoning and land transaction was Carl Lizza’s project but the consulting work and fees paid to Ippolito were from Elia Lizza.

In 2010, town officials were considering a proposal to rezone the property on West John Street, the site of an asphalt plant, for senior housing, and to transfer the Engel Street property, which also had an asphalt plant, to the town.

Newsday reported at the time the planning department was reviewing the proposal that Ippolito viewed the closure of asphalt plants as an opportunity to end nearby residents’ complaints and allow the senior housing to be built.

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When Carl Lizza Jr. died in July 2011, the deal was thrown into doubt . Transcripts of town meetings detail Ippolito’s involvement in negotiations with the Lizzas to get the rezoning and site plan approved.

“We were very close to resolving the settlement between all the members of the family and the various corporations that were involved when he passed on,” Ippolito said at an Oct. 18, 2011, town board meeting, according to a transcript.

Ippolito said then that he had met with the trustees and “all of the family has signed the agreement” for the project and the land deal. He said he expected contracts to arrive the following week and the family’s “loose ends” to be tied up by December.

“The deal is done, we will close both [asphalt] plants,” Ippolito said, according to transcripts. He added that if the board granted the application, construction would begin the following year.

Oyster Bay Town Supervisor John Venditto praised Ippolito for “holding this thing together,” according the documents.

The Lizzas’ attorney, John Carman of Garden City, said in a statement that Cantiague Commons was the “brain child” of Carl Lizza Jr. and was “potentially valuable to many members of the Lizza family.” Obtaining the rezoning, however, came with “a price tag of surrendering the asphalt plant which was worth $5 [million] to $10 million a year to the Lizza family.

“Against this backdrop, the idea that Fred Ippolito was paid to change the zoning makes no sense,” Carman said.

In 2012, the town board created a new zoning designation sought by Lizza — the Planned Unit Development/Residence 30 District — and gave conditional approval to the zoning change on the property on West John Street.

The 390-unit complex was never built, but the town gained ownership of 50 Engel St. by agreeing to pay $2.5 million for it instead of having the Lizza family donate it. The town bought the property in 2013, records show.

Tom Sabellico, the town’s special counsel, said the zoning change never went through because the Lizzas did not meet a condition to reveal the names of all the owners of the project. Carman said he remembered it differently, that county approval was sought and never given.

The land at 50 Engel St. was supposed to become a park or community center. The land remains empty.