Frederick Ippolito, ex-Oyster Bay commish, sentenced to 27 months

Frederick Ippolito, former Town of Oyster Bay commissioner, was sentenced Wednesday to 2 years and 3 months in prison in a tax evasion case.

Before handing down the sentence, U.S. District Judge Leonard Wexler repeated his criticism of Ippolito and town officials for not recognizing that Ippolito’s dealings with a paving contractor were a conflict of interest.

“That’s a total conflict,” Wexler said. “Any kid would know that.”

Speaking of the relationship between all parties, the judge said, “What’s going on with this town . . . something is corrupt.”

Ippolito, 77, of Syosset, pleaded guilty in January to evading taxes in connection with $2 million in outside consulting fees he received while working as the town’s planning and development commissioner. The money came from Carlo Lizza & Sons, a paving contractor that did business with the town, as well as from the Lizza family trust, according to federal prosecutors.

Wexler had postponed the sentencing twice, once in July and once in August, saying he was not satisfied with the explanations he had been given as to whether the consultant payments to Ippolito influenced town decisions in awarding paving contracts and what role Ippolito had in awarding the contracts.

At the sentencing Wednesday, Wexler said town officials were well aware of Ippolito’s relations with the Lizzas and both they and Ippolito should have known the situation was an “obvious conflict of interest.”

The judge said it’s true that Ippolito informed the town board of ethics about his arrangement with the contractor and the family trust, but the board included three lawyers who worked for the town. Those board members should have recognized the conflict of interest, the judge said.

Wexler also said town board minutes in 2012 indicated that “the defendant Ippolito played a key role in the negotiations” with Lizza and the town involving two properties.

Before he joined the town, Ippolito had worked full time for the contractor, earning $60,000 per year, the judge said. Wexler said that if there was no conflict of interest when he became a town commissioner in 2009, then why was Ippolito getting $300,000 to $400,000 a year as a part-time consultant for Lizza.

Wexler also said the reason for the $2 million was not exactly clear.

Some unidentified Lizza people said he was given the money because, “We liked him,” the judge said. “So you paid him $300,000 to $400,000 a year because you liked him?” the judge asked.

“Then others said, ‘no. We gave it to him because we hired him now as a consultant,’ ” the judge said. “They never used him before as a consultant, but when he becomes commissioner, he becomes a consultant for them.”

Wexler said Ippolito also said at one point that the money was for “back compensation for when he worked for them.”

“Somebody’s lying, Somebody’s misstating,” Wexler said.

“Now, whether it was criminal or not, it was an obvious conflict of interest,” the judge said. “When he is getting over $2 million from someone he’s supposed to be regulating . . . that’s certainly a conflict.”

As part of a plea bargain Ippolito made in January in admitting guilt to tax evasion, he faced a sentence of 18 to 24 months in prison. Despite the plea bargain, Wexler has previously said he might give Ippolito as much as 5 years in prison.

At sentencing Wednesday, Wexler said he was going beyond the plea deal only by three months because if he had gone beyond that, Ippolito had the right to appeal.

In addition to the sentence of 2 years and 3 months, the judge also sentenced Ippolito to 3 years of supervised release and ordered him to pay nearly $550,000 in restitution.

“While certainly we are gratified that the court did not largely enhance the sentence, we are concerned with the manner in which the court arrived at the sentence,” Ippolito’s attorney, Brian Griffin of Garden City, said after the hearing. “The sentencing record clearly indicated the court sentenced Mr. Ippolito largely on the basis of the actions or inactions of others.”

Marta Kane, a spokeswoman for Oyster Bay, said the town would decline to comment until it had a chance to study the court proceedings.

An attorney for the Lizzas did not return several requests for comment.

Federal prosecutors Catherine Mirabile and Raymond Tierney, who handled the case, declined to comment.

U.S. Attorney for the Eastern District Robert Capers said the sentence “reinforces that no one is immune from the laws of the United States.”

By Robert E. Kessler

Robert.Kessler@newsday.com

Bob Kessler covers federal law, including law enforcement agencies such as the FBI, DEA, IRS and ATF, as well as the federal courts.