The U.S. attorney for the Eastern District of New York on Thursday served the Town of Hempstead with a subpoena for records on a vendor who runs Hempstead's popular Malibu Beach Park, according to a town memo obtained by Newsday.
Hempstead Supervisor Laura Gillen sent the memo, the authenticity of which was confirmed by the town, to the town attorney, comptroller, parks commissioner and other Hempstead officials. Gillen asked them to “fully comply” with the subpoena, which is seeking documents related to the vendor, Dover Gourmet Corp., and its chief executive, Butch Yamali.
“Any attempts to in any way hinder this investigation, such as by hiding, covering up, deleting or destroying records related to this investigation will also be immediately reported to the FBI agent in charge of this investigation, with whom my office is cooperating,” Gillen wrote in the memo.
Yamali, who said he has pumped millions of dollars into improving Mailbu since he began operating the Lido Beach recreation complex in 2009, said he has "nothing to hide."
"I've been a respected vendor in all different municipalities for 30 years," he said. "I didn't do anything wrong."
Yamali said he has not been contacted by federal officials.
Gillen and John Marzulli, a spokesman for the U.S. attorney’s office, declined to comment.
The subpoena follows Newsday reports on Dover’s work at Malibu, including on town records showing the Freeport company has not paid Hempstead rent on the property for nearly a year, accumulating a balance of $531,400. Yamali said the town owes him more than $2 million for capital improvements and that town officials had instructed him not to pay the rent — an account one Hempstead official disputed.
Newsday also reported that the town comptroller and parks commissioner extended Yamali’s contract in April for another five years without the knowledge of the supervisor or the approval of the town board.
The subpoena asks for correspondence, contracts, invoices and other documents from 2001 to the present related to Yamali’s various town contracts, according to the memo.
Yamali, of Merrick, also operates the Hempstead-owned Sands Catering Hall in Lido Beach, as well as concession stands and vending machines on town property. Yamali said he holds other concessions contracts with Nassau and Suffolk counties and the Town of Islip.
The subpoena came one day after Gillen demanded the resignation of Parks Commissioner Daniel Lino over his role in what Gillen has called a secretly negotiated "sweetheart deal" for Yamali. She also called on the town board next week to annul the contract extension and hire outside counsel to investigate it.
Lino did not respond to a request for comment.
Yamali has dismissed Gillen's claims as political grandstanding and said he planned to sue her for defamation.
Gillen is running for re-election in November.
Malibu can attract thousands of weekend visitors, with some families paying up to $6,000 per summer to rent one of its more than 600 cabanas. Dover is to pay Hempstead $560,300 in rent on the contract this year.