The City of Rye is gearing up to file a lawsuit against Scott Yandrasevich, the former manager of the Rye Golf Club, seeking to recoup hundreds of thousands of dollars that he and his wife allegedly bilked from the city.
City Council members huddled in a closed-door executive session Monday night to discuss civil litigation to recover taxpayer money the Yandraseviches allegedly funneled through a private staffing company they created in 2006.
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Last week, the council released the findings of a four-month investigation alleging that the couple used RM Staffing and other so-called shell companies to "steal" taxpayer money intended to staff and operate the club's restaurant.
Rye officials have turned their findings over to the office of Westchester County District Attorney Janet DiFiore for possible prosecution. A spokesman for the DA's office said prosecutors are reviewing materials from the city.
"We don't have to wait for the criminal proceedings to be resolved," said Kristen Wilson, the city's Corporation Counsel, said Tuesday. "There's nothing preventing us from moving ahead with civil litigation."
Mayor Doug French said city officials aren't sure exactly how much of the $7 million the city paid to RM staffing from 2006 to 2012 they will be seeking through litigation, but said it was conservatively more than $200,000. He said the city will also be seeking to recover upward of $300,000 in legal fees and other costs stemming from the investigation.
The city is still waiting for Yandrasevich's bank records, which have been subpoenaed from various financial entities.
"That's the piece we are waiting for," French told Newsday on Monday. "We definitely are going to be pursuing all legal action but we need that hard number to present to our insurance carrier and for use with the civil litigation."
Yandrasevich, 48, was placed on paid leave in October after he was accused by club members and city officials of misappropriating funds and having a conflict of interest. He resigned last month from his $106,080-per-year job and subsequently was kicked out of the clubhouse, where he had lived since 2002. He couldn't be reached for comment.
The investigation, conducted by the council, revealed that Yandrasevich's wife got a salary of $175,000 a year from RM staffing as a "bookkeeper" along with other payments. The couple used the money to buy two boats and a new house in North Carolina, the report said. In 2010, she used an RM Staffing check to pay off $6,891 in personal debt, the probe stated.
Meanwhile, the Yandraseviches refused to give pay raises to staff members they employed at the club's restaurant, even as they billed the city for three times the average $10 hourly wage that some waiting staff and others were being paid.
Although Yandrasevich told city officials that his "consulting" work for RM Staffing was limited to reviewing contracts and that he received only $1,000 in compensation, the investigation found that he was "deeply involved" in the details of RM Staffing's business and controlled its finances. He persuaded the owner of a local graphic design company, Suzanne Ruggiero-Madeo of Studio Y, to open the company under her name. Ruggiero-Madeo didn't return a phone call Tuesday.
Yandrasevich also allegedly used golf club staffers to expand RM Staffing's operations to restaurants at the Morris Yacht & Beach Club in the Bronx and at the Oak Hills Park Golf Course in Norwalk, Conn., in 2010 and last year.
Although Yandrasevich ran the restaurant at Oak Hill Golf Course from late May until December, he didn't renew a sublease with the previous restaurant's operator and stopped providing catering services, according to a representative for the golf club who didn't want to be identified. The representative said Yandrasevich paid the rent on time and didn't have access to the club's operating funds, so they weren't concerned about a situation similar to the Rye Golf Club.
A representative for the Morris Yacht Club said RM Staffing is still managing the club's restaurant operations but added that the club hasn't encountered any issues with finances since Yandrasevich's company took over in October 2010.
"I haven't seen any evidence of stealing on our end," said Stewart Dalsimer, president of the Morris Yacht & Beach Club's board of directors. "They've served us well for the past two years, and they've been very responsive to our customers."
Dalsimer said the board would be reviewing details of the investigation but at this point has no intention of ending the contract with RM Staffing. "We're paying attention, but I haven't seen any charges being filed yet," he said.
Rye's investigation found that other city employees were not involved in the scheme, but it faulted former and current city officials for not doing enough to verify the payments from the staffing company or question the club's finances.
The Rye Golf Club, which features an 18-hole golf course, pool and restaurant at Whitby Castle -- built as a private residence in 1852 -- has been owned by the city since 1965. Memberships to the club cost more than $4,500 a year, and the city collects more than $400,000 a year in revenue from its operations, including golf course and restaurant proceeds.