The U.S. Securities and Exchange Commission has charged former Oyster Bay Town Attorney Leonard Genova with securities fraud in a case Genova has agreed to settle, according to the agency and his attorney.
The SEC on Thursday charged Genova with “defrauding investors” and violating securities law in connection with indirect town loan guarantees to a former town concessionaire, the agency said in a statement.
The SEC alleged in the civil complaint filed in U.S. Eastern District Court in Central Islip that Genova and others “engaged in a scheme to defraud investors” by assisting a concessionaire in obtaining the loan guarantees and not disclosing them to the town’s taxpayers or municipal bond investors.
The loan guarantees are part of the federal corruption case against former Town Supervisor John Vendittoand former Nassau County Executive Edward Mangano and his wife, Linda.
“Genova has agreed to settle the case by agreeing to permanent injunctions against violating the charged securities laws or participating in any offerings of municipal securities,” the SEC said on its website Thursday.
Genova’s attorney, Nicholas Gravante Jr., of Boies Schiller Flexner LLP in Manhattan, said Thursday his client had agreed to the injunctions to settle the case. The court may decide to impose monetary penalties at a later date, according to Gravante and the SEC.
“He is agreeing not to contest the allegations in this complaint for purposes of entering into this settlement,” Gravante said.
The settlement is not an admission of the allegations, Gravante said, adding Genova “is not admitting to anything in the complaint.”
Genova, 54, of Massapequa, worked in Oyster Bay Town government from 1992 until January 2017, first as an assistant town attorney then as deputy supervisor and finally as town attorney.
According to the SEC complaint, Genova was involved in or aware of much of the negotiations about the indirect loan guarantees, but made “false and misleading statements and omissions” to bond investors that gave “a false picture of the town’s financial condition and the quality of its management.”
The SEC complaint details alleged gifts given to Genova by the concessionaire, including that he “provided Genova and his family members with the free use of limousine services, free meals and beverages at the Concessionaire’s restaurants, and substantial discounts for events held at those restaurants.” The document also states that Genova had use of private office space at one of the concessionaire’s restaurants.
Genova has not been charged in the corruption cases. “There have never been any criminal charges filed against Mr. Genova,” Gravante said Thursday.
The complaint does not name the concessionaire.
Harendra Singh, who operated concessions at the Oyster Bay Town Golf Course and other locations, in 2016 pleaded guilty to bribery charges, court documents disclosed last month.
Singh pleaded guilty to conspiracy to commit federal program bribery and honest services wire fraud regarding Nassau and Oyster Bay, a count of federal program bribery regarding those governments, two counts of honest services wire fraud for those governments, conspiracy to commit federal program bribery and honest services fraud regarding New York City, honest services fraud regarding the city, and obstructing and impeding the due administration of the Internal Revenue laws, or filing false tax returns, the court documents disclosed last month.
Both the town and the county awarded contracts to Singh in return for bribes, those documents said. Town officials, in return, indirectly guaranteed loans to Singh’s companies, the papers stated.
The SEC in November filed a securities fraud complaint against Venditto and the Town of Oyster Bay. That case has been stayed pending the outcome of the criminal corruption case.
Documents filed in the criminal case last month also show former Deputy Town Attorney Frederick Mei pleaded guilty in 2015 to a charge of honest services fraud in a scheme in which he received $50,000 in checks made out to cash, and payments on a $36,000 BMW lease to aid a town concessionaire obtain millions in indirect loan guarantees from the town. The circumstances of the charges match those to which Singh has pleaded guilty.
Oyster Bay Town Attorney Joseph Nocella said in an emailed statement Thursday that “the town will not comment on this action by the prior administration due to pending litigation.”
Edward Mangano has been charged with conspiracy, bribery, wire fraud and extortion. His wife has been charged with making false statements, conspiracy and obstruction of justice.
Venditto is facing charges of conspiracy, bribery, securities fraud, wire fraud, making false statements and obstruction of justice.
All have pleaded not guilty.
Venditto was accused in a superseding indictment in November of 21 charges involving securities fraud in the town’s public offering of more than $1 billion in securities between 2010 and 2016. The Manganos were not accused in the securities fraud.
The trial for the Manganos and Venditto is scheduled to start March 12.