Oyster Bay has filed a lawsuit against former Town Attorney Leonard Genova seeking more than $840,000 for “negligence” and “malpractice” related to his role in a loan guarantee scheme at the center of a federal corruption trial this year.
The lawsuit filed Wednesday in State Supreme Court in Mineola alleges Genova’s actions forced the town to “expend millions in legal fees to defend against meritless claims” arising from the loan guarantees.
Former town concessionaire and political donor Harendra Singh in 2016 pleaded guilty to bribing Oyster Bay officials in return for securing $20 million in loans indirectly guaranteed by the town. Oyster Bay officials have said that one of the guarantees was legitimate, but they dispute others that led to multimillion-dollar lawsuits filed against the town by creditors. The U.S. Securities and Exchange Commission has also sued the town, alleging securities fraud over how it disclosed and failed to disclose the guarantees to municipal bond investors.
Former Town Supervisor John Venditto, who was Genova’s boss and mentor, in March was acquitted on all charges in the federal corruption trial. Former Nassau County Executive Edward Mangano and his wife, Linda, are to be retried in the corruption trial after the jury was unable to reach a verdict against them, resulting in a mistrial.
Genova, who was granted immunity from criminal prosecution in return for testifying in the Venditto-Mangano trial, said on the witness stand that he had accepted bribes from Singh and had signed amendments in the loan guarantee arrangement without reading them.
Genova’s attorney, Nicholas Gravante of Manhattan-based Boies Schiller Flexner LLP, said in a statement Thursday the lawsuit “appears to be unnecessarily punitive and politically motivated.”
Gravante said Genova “intends to aggressively defend the action, which seeks damages that dramatically overstate the harm, if any, that his conduct caused the Town of Oyster Bay.”
The town’s lawsuit alleges that Genova’s testimony at that trial “indicates that he was wholly derelict in his duties by failing to oversee his office, by failing to exercise the level of care that any prudent town attorney would exercise, and ... engaged in other wrongful acts for which the town should be compensated.”
“Genova acted disloyally and adversely to the town, including by ... accepting bribes and illegal gratuities,” the lawsuit alleges.
Current Town Attorney Joseph Nocella said in a statement Thursday that Oyster Bay “has a fiduciary obligation to taxpayers to recover money lost from the self-admitted gross negligence, incompetence and illegal acts of its former employees.”
The town lawsuit seeks to recover more than six years of his annual salary of $140,000, plus unspecified punitive damages.
Among the “causes of action” listed in the lawsuit by the town against Genova are “breach of fiduciary duty” and “legal malpractice.” Without Genova’s actions, “the Town would not have sustained such damages,” according to the lawsuit.
The SEC lawsuit against Oyster Bay and Venditto, filed last year in U.S. District Court Eastern Division in Central Islip, was stayed pending the outcome of the criminal corruption trial. Nocella said last week that lifting the stay “appears to be imminent.”
The town board in June voted against paying for Venditto’s legal fees in the SEC case. Venditto this month sued the town in New York State Supreme Court seeking payment for those legal fees.
In March, Genova settled a separate case brought against him by the SEC in which the agency alleged he “engaged in a scheme to defraud investors” through the loan guarantee scheme.
In settling the SEC case, Genova agreed to “permanent injunctions” against violating securities laws or participating in any offering of municipal securities, the agency announced at the time.