A prosecutor told a Manhattan federal court jury that one-time Long Island banana mogul Thomas Hoey used more than $750,000 in worker profit-sharing funds to “line his own pockets” and live the high life as Hoey’s embezzlement trial began Tuesday.
“He ransacked the company to pay his own expenses,” prosecutor Kristy Greenberg said in her opening argument. “ . . . He used his employees’ retirement accounts as his own personal piggy bank. He stole, until he had taken everything.”
But defense lawyer Dominic Amorosa told them that the embezzlement charge was an effort to criminalize Hoey’s effort to use worker money to prop up the Long Island Banana Co., a family business, during cash flow crunches and save jobs, with plans to repay it.
“If they didn’t do that, they would have gone into default and the company would have gone broke,” Amorosa argued. “The money was not stolen. It was borrowed in good faith.”
Hoey, 48, of Garden City is already imprisoned for distributing cocaine during a sex party that ended in a woman’s overdose death, and also faces a state sentence for assaulting his girlfriend and trying to cover it up. Long Island Banana of Lynbrook, a produce distributor, went bankrupt.
Jurors don’t know about those cases, and the judge is keeping out testimony about Hoey’s spending on cocaine and prostitutes — while allowing evidence that he spent corporate money on foreign travel, strip clubs and a girlfriend’s apartment while using worker funds for the business.
Greenberg told jurors that Hoey took six-figure salaries and raises during the same years he was raiding retirement funds, kept residences in Garden City, Westhampton and Manhattan, and spent on country clubs, sporting events and “thousands in cash” going out on the town.
“He spent this money on himself, not on the company,” she said. “Hoey lived in the lap of luxury, made possible from the money he had stolen.”
She said prosecution witnesses would include accountants who warned Hoey that borrowing worker funds was a “prohibited transaction” under federal law, and Amorosa seemed to concede that point.
But he said several of the largest beneficiaries were Hoey family members, so it wasn’t as serious as it seemed. “A prohibited transaction is no big deal,” Amorosa said, noting that the movement of the money was reported on tax forms. “It’s not a traffic ticket, but it’s no big deal.”
The government’s first witness was John Reina of Massapequa, a manager of the company’s Suffolk operations, who said he lost more than $140,000 in vested retirement money, and was never told by Hoey that the money was needed to subsidize operations.
The first Reina learned of it, he testified, was when the two were trying to prioritize a list of suppliers who needed to get paid, and Hoey said his accountants were giving him a hard time.
“I have to put the money back into profit-sharing,” Hoey said, according to Reina, “or I’m going to federal prison.”
The trial resumes on Wednesday.