Long Beach has filed two separate lawsuits against former city managers Jack Schnirman and Rob Agostisi seeking to claw back $2.4 million in what officials claim are illegal payouts to city employees.
The lawsuits accuse Schnirman, the Democratic Nassau County comptroller, and Agostisi of breach of duty of loyalty, fraud, conspiracy to commit fraud, and constructive fraud violating state law. The suit is also seeking an accounting of all payouts made from 2012 to 2018.
Long Beach officials filed the suit that personally names the two men Friday in Nassau County Supreme Court through their outside counsel, John Gross and the Hauppauge law firm Ingerman Smith.
The suit alleges a history of retirement incentives and overpayments of accrued vacation, personal and sick time to city employees and an agreement to pay Schnirman and Agostisi their accrued time in full, which officials say violated city code.
“The defendant’s actions require he be held personally and individually liable to city for payments made in violation of the charter," the suits against both men state.
Attorneys for the city argue Schnirman violated the “faithless servant doctrine,” and violated the city's loyalty and trust. The lawyers also said Schnirman and Agostisi would no longer be protected under the city’s liability if their actions result in a misdemeanor or higher crimes.
The Nassau County District Attorney’s Office and a U.S. attorney’s federal grand jury have been investigating the city’s payouts for two years, but no charges have been filed.
“The investigation is ongoing, and we anticipate making an announcement soon," district attorney spokeswoman Miriam Sholder said Tuesday.
Schnirman deferred comment to the comptroller's spokesman.
"Jack is not going to be distracted by frivolous lawsuits and political vendettas that waste taxpayer dollars," spokesman Brett Spielberg said. "We are focused on the work Nassau residents elected us to do."
Agostisi referred comment Tuesday to his Carle Place attorney Rick Ostrove.
"The lawsuit is totally meritless. It is a misuse of taxpayer dollars that selectively targets political foes, and seems to be an effort to distract from the city's issues, especially those surrounding the Superblock," Ostrove said.
A state comptroller audit last year found that $6 million in payments were made in 2018 to 43 employees, but $513,000 was overpaid to at least 10 employees. The comptroller’s office recommended the city try to recoup the overpayments.
State officials said Long Beach has failed to correct its separation payment policy for more than 25 years after previous audits found payments were inconsistent with city code and union contracts.
Schnirman last September returned $53,000 that the audit found was overpaid to him for sick time as part of a $108,000 separation payment at the end of 2017 when he was elected comptroller.
“The former city manager took advantage of his trust and authority and misappropriated public funds for his own benefit, which he later returned,” the city’s lawsuit against Schnirman said. “As a consequence of this tortious and unlawful conduct the city has suffered a loss of at least $1.5 million.”
The lawsuit against Agostisi states he received a $128,000 separation payment in a confidential agreement with Schnirman that paid him his full accrued time in exchange for not leaving for another job in 2016.
The city is seeking $889,985 from Agostisi, which includes his separation pay and payments made during his tenure from 2006 to 2019. The remaining money sought includes "the return of wages from his first act of disloyalty until his resignation."
The lawsuit argues Agostisi "failed to counsel the city manger of impropriety of drawdown payments" while working in the corporation counsel office.
He was named acting city manager from February to September 2019. He left in September to serve as counsel to the Hauppauge-based LGBT Network.
“The defendant breached his duty of good faith, loyalty, trust and confidence to (the city) when he, motivated by interests unrelated to the city’s reputation or operation, made misrepresentations and omissions to the city council, offered early retirement incentives and approved and or accepted the payment of monies for unused sick, vacation or personal time directly against terms specifically enumerated in the city charter,” the city’s lawsuits against Schnirman and Agostisi state.
Republican Richard Nicolello, presiding officer of the Nassau County Legislature, questioned whether Schnirman should remain in office as comptroller.
"This suit is deeply troubling and raises questions as to whether the comptroller can continue," he said. "With the county struggling with a major fiscal crisis, we cannot afford a distracted, compromised so-called fiscal watchdog."
Nassau County Democratic Minority Leader Kevan Abrahams declined to comment.