NY official: Fagen not exempt from reporting income

Democratic councilman Michael Fagen responds to a presentation

Democratic councilman Michael Fagen responds to a presentation by an external auditor regarding Long Beach's struggling finances. (Feb. 6, 2012) (Credit: Danielle Finkelstein)

Long Beach City Councilman Michael Fagen's status as an elected official did not exempt him from reporting his income while he collected unemployment benefits, a labor department official testified Tuesday during Fagen's trial.

Fagen is on trial for larceny because prosecutors charge he illegally collected more than $15,000 in unemployment checks in 2010 while he worked as a city councilman.

His defense attorney, Marc Gann of Mineola, has argued that Fagen is a part-time worker and thereby eligible for unemployment benefits, and that his status as an elected official was different from other types of employment.

But Brian Curtis, a supervising hearing representative with the state Department of Labor called to the stand by prosecutors, said elected work is "employment that must be reported" to the state.

The amount of money a worker earns decreases the amount he can collect in unemployment benefits. "The state requires you to report any employment of any kind," Curtis said. "They would be required to report income in the same way anyone else would be required to."

While questioning Curtis, Gann noted a change in the labor department's handbook, which informs unemployment benefit recipients of the rules. The handbook was altered in September 2010 to say residents must report all the work they perform "in connection with a public office."

That change came after the period in which Fagen is accused of illegally collecting benefits, Gann said.

Gann said elected officials are "in a category of their own."

Fagen earns about $20,000 per year as a city councilman, a post the city considers full-time, Long Beach officials have said. But Gann has said Fagen's salary and work schedule -- which sometimes only involves a few minutes of work in a day -- illustrate that he is a part-time worker.

Earlier in the trial, Gann made the case that Fagen's arrest came after he ran afoul of the Long Beach political establishment when he took office in January 2010. Fagen opened his claim for unemployment benefits in September 2009. Long Beach then was controlled by the Republican Party; Democrats took over last year after winning control of the city council.

The trial is scheduled to resume at Nassau County Supreme Court Wednesday. Prosecutors have said they expect the trial to conclude by the end of the month. Fagen faces felony charges of third-degree grand larceny, petty larceny and 38 counts of first-degree filing a false instrument. He faces up to 7 years in prison if convicted.

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