An Orange County judge assigned to oversee the Kermit Gitenstein Foundation case in Nassau County has appointed a new receiver to replace prominent Democratic attorney Steven R. Schlesinger.
Acting Supreme Court Justice Robert A. Onofry on Thursday named Howard Protter of Walden, New York, receiver of the Gitenstein Foundation’s assets.
Besides appointing a new receiver, Onofry ordered the dissolution of the Gitenstein Foundation, and the distribution of its assets to charities with missions similar to that of the foundation.
The judge combined the dissolution of the foundation with another court battle over the estate accountings of Shirley Gitenstein’s siblings. The ruling means Schlesinger will have a seat at the table when the charity’s remaining money is disbursed, and in any discussions of whether grants made previously should be returned to the Gitenstein charity.
Schlesinger had appealed the Nassau Surrogate’s Court judge’s ruling to Nassau County Supreme Court in an effort to remain in the case, albeit not as receiver of the foundation.
“It’s hard to imagine a situation where a litigant has a more direct stake in the outcome of the proceedings than Schlesinger does in this instance,” Onofry wrote in his ruling.
Gary Lewi, a spokesman for Schlesinger, said: “We believe this is a well-reasoned decision based upon the law and the facts and we intend to vigorously prosecute our claims before the court. “
The foundation had about $1 million remaining as of late last year, according to court records.
On Sept. 29, Deputy Chief Administrative Judge Michael V. Coccoma, one of the top judicial supervisors in the state, picked Onofry to hear the Gitenstein case after a Nassau County Supreme Court judge asked him to consider appointing a new judge. Coccoma decided that Nassau County Supreme Court Administrative Judge Thomas Adams shouldn’t hear the case “to avoid an inference or appearance of impropriety.”
In May, Nassau Surrogate Judge Margaret Reilly issued a scathing assessment of Schlesinger’s stewardship of the foundation and removed him as receiver. She said he made more than $8 million in charitable donations without court approval and that he gave money to charities that “did not remotely resemble” the foundation’s purpose of aiding Jewish and health-related charities.
Among the recipients of the money was a foundation run by Gary Melius, a political power broker and owner of Oheka Castle in Huntington, and another run by former Sen. Alfonse D’Amato. In August, federal prosecutors subpoenaed records of all three foundations as part of a wide-ranging grand jury investigation into their finances.
Adams, the Nassau judge, said through a court spokesman that he and Melius are longtime friends and that he asked Coccoma to determine “the propriety of keeping the matter in the Nassau County Supreme Court.”
The Gitenstein Foundation was a family trust set up in 1968. Shirley Gitenstein, the last remaining family member, died in 2007 with no heirs. A Surrogate Court judge appointed Schlesinger to manage the $11 million foundation.
Newsday published an investigation in August 2015 that raised questions about Schlesinger’s disbursements of foundation money. For example, he directed $250,000 to the Elena Melius Foundation the same week he held his wedding at Oheka. Records show that Schlesinger paid for the wedding with a $75,000 check from his law firm’s account five months later.