Oceanside Sanitation District officials have sought to dismiss a lawsuit from taxpayers and former employees over retirement payouts to ex-supervisors, claiming the time to recoup the money has lapsed beyond the statute of limitations.
In a motion filed Jan. 28 in Nassau County Supreme Court, officials for the special district, also known as Hempstead Sanitary District No. 7, said the taxpayer lawsuit should be dismissed because the allegations in it don’t prove fraud or “waste of public property . . . for entirely illegal purposes.”
Former sanitation employee Joseph Samoles filed the lawsuit in November attempting to recoup $1 million in retirement and other payments made to former district supervisor Michael Scarlata and his son, Charles. The lawsuit was filed against the Scarlatas and three of the district’s current commissioners.
A 2014 state comptroller’s audit concluded the district violated New York finance law when it paid Michael Scarlata $391,000 from 1998 to 2013 and paid Charles Scarlata $421,253 in unauthorized payments in 2012 and 2013. The audit directed district officials to meet with their attorney to attempt to recoup the payments.
The district in December filed a plan with the comptroller’s office stating it was investigating recovering the payments that were made to the Scarlatas while they continued to work as district supervisors.
The district also gave Michael Scarlata and his company, Assistance Corp., a five-year, $240,000 consulting contract in 2013. The contract was terminated by the district board in December after he was placed on paid administrative leave in June while the board investigated the audit.
The district’s Uniondale-based attorney, Jared Kasschau, argued in court filings that the district was unable to recoup the payments because they had lapsed beyond New York state law’s three-year period to reclaim funds. District officials say the last payments were made in January 2012.
“There is no question that the payments made by Sani 7 were legal,” the district’s motion to dismiss states, adding that the allegations “if anything, amount only to their disagreement with the way the Board exercised its discretion.”
The district’s motion also states that Michael Scarlata’s payments for his consulting contract did not “constitute a gift of public funds” because they were approved by the board as contracts and were not illegal.
Austin Graff, a Carle Place-based attorney for the taxpayers, said in an interview Friday that the district’s payments were made illegally and the allegations were submitted by taxpayers to the U.S. attorney’s office. Eastern District U.S. Attorney’s officials would not comment on any pending cases but said they did not have any case filed against the Scarlatas.
“The district commissioners had an obligation to go after this money because it was an illegal payment,” Graff said.