Former William Floyd treasurer wrote checks to self, DA says

James Wright, left, leaves the Cohalan Court Complex in Central Islip with his attorney, Matthew Rosenblum, after his arraignment on theft charges in connection with an investigation into missing funds from the William Floyd School District. (Newsday Photo / David L. Pokress / June 29, 2004)

As treasurer of the William Floyd school district in Mastic Beach, James Wright had the freedom to write checks to himself, sign them, endorse them and cash them. And that is just what he did, according to the Suffolk County district attorney, who yesterday charged him with grand larceny for allegedly stealing at least $700,000 in school funds.

District Attorney Thomas Spota blasted the district for failing to put in proper internal controls that could have stopped the thefts - which date back to at least the mid-1990s and could surpass $1 million by the time the ongoing investigation is completed.

"The bottom line is that a close look at the records discloses the crimes rather clearly," Spota said.

In one nine-day span in the fall of 2002, Wright issued himself two checks totaling $353,132.74 - one for $186,566.37 and another for $166,566.37.

Asked how any district employee could sign checks to himself, Superintendent Richard Hawkins said, "I think in every organization, somebody signs your checks."

Pressed further on how Wright could write such large checks to himself, Hawkins said the district wasn't aware of them.

District officials yesterday scrambled to defend their practices, arguing that they had done everything possible to uncover the thefts. "We discovered the issue, so our controls couldn't be that bad," Hawkins said.

Records subpoenaed

William Floyd officials cooperated fully with prosecutors, school officials said. "We've done everything right in our eyes," said Vincent Pascale, school board president.

But prosecutors disagreed. They said the district's cooperation had been limited and that yesterday's allegations were an outgrowth of their own probe of the district triggered in May 2003 by the arrest and plea of former Legis. Fred Towle (R-Shirley). As a legislator, Towle worked closely with William Floyd officials. Information supplied by Towle led investigators to subpoena 104 boxes of district records last September.

Because of the tips supplied by Towle and others, Spota's ongoing public corruption probe has ballooned throughout Suffolk County. Spota has said he's limited only by manpower.

At his arraignment in First District Court in Central Islip, Wright, 56, of 1080 Locust Ave., Bohemia, pleaded not guilty and was released on his own recognizance.

Wright allegedly took two $350,000 separation payments upon retiring from the district in January 2003, according to district officials who asked not to be named. Assistant District Attorney Edward Heilig said Wright has paid back about $530,000 to the district, in payments made between December 2003 and February 2004.

"His motives were good. His actions may not have been," said Wright's attorney, Matthew Rosenblum of Central Islip.

'In a jam'

Rosenblum said Wright was not typical of someone accused of stealing money. He didn't make extravagant purchases. His client lived modestly and used some of the money to buy his daughter life insurance, he said. "He's had a very tough life," Rosenblum said. "He made something of himself. Obviously, he got himself into a jam. You can't paint him with the same brush as you paint other people."

Spota said that between 2000 and 2001, Wright wrote several checks to himself totaling more than $74,000. In late 2002, shortly before his retirement, Wright wrote the two checks totaling $353,132.74 in a span of nine days. Spota said Wright used that money to open brokerage accounts and buy a life insurance policy.

"School district and school officials may assign blame that a trusted official used school district funds for their own personal use and benefit," Spota said. "This disregards the fact that ultimate responsibility for school district financial safeguards rests with the school board and school officials."

Although efforts were made to reach all seven school board members, only one commented for the record. Pascale, board president, said, "I don't know what more we could've done."

State law requires that an internal auditor review all school district payments before they're made. Other districts build in more safeguards. Many districts require that two people sign off on all checks. John Powell, Garden City assistant superintendent for business and finance, said "You should never be in a position to both request and approve payment."

Others probed

Heilig said prosecutors requested that Wright be released without bail so that he could continue cooperating as they extend their probe into other areas of the school district. If convicted, Wright could be sentenced to 15 years in prison. He is scheduled to appear in court on Aug. 28.

"We are looking into other people in the district," Heilig said, citing construction projects, professional service contracts and vendors.

They also are looking into Daniel Cifonelli, former acting superintendent for business, who was dismissed two weeks ago for financial irregularities Hawkins would not specify.

Although Cifonelli retired in 1998 with a pension of $133,428, he returned to the district as a consultant. From 1999 through last month, the district paid his consulting company, DCC Consulting, more than $743,000, according to school records.

The disclosures about William Floyd's finances come on the heels of a financial scandal in Roslyn, where former chief financial officer Pamela Gluckin has pleaded not guilty to charges of first-degree grand larceny for allegedly stealing more than $1 million.

Gluckin used to work for Wright in the William Floyd school district, according to her job application at Roslyn.

A Newsday investigation found that in the past five years, New York State auditors have examined the books of only 14 of Long Island's 124 districts. Hawkins said his district's situation did not compare to the situation in Roslyn, but Heilig said he saw at least one similarity.

"In Roslyn, and with this case, it appears it was very easy for Mr. Wright to do what he did," Heilig said. "It seems like it's awfully easy to do this kind of thing, especially in the William Floyd school district."

Staff writer Olivia Winslow contributed to this story.

Related topic galleries: Accounting and Auditing, Trials, Crimes, Long Island, Thomas Spota, New York, National Government