Suffolk County ended tax breaks to a Commack company on Tuesday after federal prosecutors charged the company with fraudulently passing off Chinese-made security equipment as American-made, and selling it to the U.S. government.
The county’s Industrial Development Agency halted the property-tax reduction that it gave to Aventura Technologies Inc. in February 2015. The reduction was for 12 years.
Grant Hendricks, acting chairman of the IDA board, said he believed the agency was lied to by Aventura executives in the same manner alleged by U.S. Attorney for the Eastern District of New York: the company’s surveillance and security equipment was made in China, not Suffolk, since at least 2006.
Aventura’s tax breaks “were obtained by fraudulent representation,” Hendricks said after board members discussed the issue privately. “We will direct the assessor of taxes from the Town of Smithtown to immediately place Aventura back on the tax rolls at full assessment,” which effectively ends the company’s tax break.
Aventura has saved about $167,100 in property, mortgage recording and sales taxes over the past four years, according to IDA executive director Anthony J. Catapano. He said the agency will attempt to claw back the savings.
Aventura CEO Frances Cabasso and her husband, Jack, who effectively ran Aventura, could not be reached for comment on Thursday.
Earlier this month after Jack Cabasso’s arrest, his attorney James Branden said Cabasso believes that “many of the conclusions are not fairly drawn.” Frances Cabasso’s attorney declined to comment at the time.
Prosecutors have accused the couple and other Aventura executives of potentially exposing the U.S. military and federal agencies to cybersecurity surveillance and attack by selling Chinese-made security equipment and labeling it “Made in USA.”
The equipment, including body cameras for Air Force personnel, was placed on Army and Air Force bases, in Department of Energy facilities, Navy installations and U.S. aircraft carriers, according to the federal complaint made public on Nov. 7.
In 2015, the IDA granted $306,308 in tax breaks to Aventura for its move from Hauppauge to 48 Mall Dr. in Commack, the former home of giant drugmaker Forest Laboratories. Under a $3 million plan, Aventura promised to create an incubator for technology startups in a portion of its new office.
At the time, the company had 20 employees and pledged to hire eight more. It kept that promise; a state filing shows 27 employees last year. They earned between $65,000 and $70,000 per year.
“All of our products are assembled on Long Island,” company operations manager Jonathan Lasker told a November 2014 IDA meeting.
IDA attorney William D. Wexler said Thursday the agency will reinstate Aventura’s tax breaks when and if it’s cleared of the federal charges. “We will make them whole if they are found innocent,” he said in an interview.
Wexler said it’s rare for an IDA client to face federal charges and have their tax benefits suspended. “It’s never happened” at the Suffolk IDA, which he’s represented for 14 years, or at the Babylon Town IDA, which he’s represented for 27 years.
Wexler said, “As a government agency, we felt we had to immediately take appropriate action” to respond to the federal charges against Aventura.