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Suffolk sues to recover more from Beach Hut

An audit by the Suffolk comptroller found the former county beach concessionaire failed to turn over $269,550 in licensing and gross receipts fees for 2017.

FILE PHOTO: The Beach Hut concession at Meschutt

FILE PHOTO: The Beach Hut concession at Meschutt Beach County Park in Hampton Bays is shown on Dec. 3, 2015. Suffolk County Comptroller John Kennedy, who following an audit last year, helped prosecutors recover $1.113 million in unpaid taxes and fees from Beach Hut, released his final report on Friday, July 27, 2018, which estimated more than $1 million in additional losses. Photo Credit: Gordon M. Grant

Beach Hut, ousted as Suffolk’s beach concessionaire after the firm pleaded guilty to bilking the county out of sales tax and fees, is facing a civil suit over another $270,000 in revenues the company failed to pay.

The new legal action by the county comes after an audit completed in July by Suffolk Comptroller John Kennedy found Beach Hut failed to turn over $269,549 in licensing and gross receipts fees for 2017 when the popular concessionaire still was running food, bar and music venues at three county beaches.

Kennedy, who sought further action from the Suffolk County attorney and district attorney, said he believes the county has an “excellent chance” of recovering additional money.

“This is a very basic and fundamental landlord-tenant issue,” said Kennedy. “The tenant left without fulfilling its obligations and the landlord has acted” to recoup what is owed.

A Kennedy audit sparked the criminal conviction of Beach Hut and its owner Fred Marsilio a year ago after Kennedy turned over early findings to prosecutors.

Beach Hut pleaded guilty to filing false state income tax returns from 2012 to 2016 and failing to report $1.7 million in income to avoid paying state income tax of $127,783. Beach Hut operations paid total restitution of $1.114 million in state and county sales tax, interest and penalties.

The county’s lawsuit, filed Oct. 24, says Marsilio and his various Beach Hut corporate entities failed to pay flat licensing fees or the 10 percent of gross receipts over $100,000 required in 2017.

The required nonpayments totaled $134,264 at Smith Point in Shirley, $56,118 at Cupsogue in Westhampton Dunes and $79,167 at Meschutt in Hampton Bays.

The suit also seeks the 1.5 percent per month in interest penalties mandated in the concession contracts.

Marsilio did not return calls for comment.

In court papers, Daniel Furshpan, assistant county attorney, said Suffolk did not learn “the true facts” about Marsillio’s failure to follow through on his contract until early this year after he had pleaded guilty to criminal charges and failed to respond to parks department demands for payments for 2017.

“Had the county known . . . Marsilio had no intention of paying the 10 percent of gross receipts over $100,000 . . . , the county would never have entered into,” the Smith Point, Cupsogue or Meschutt contracts, Furshpan said.

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