Smithtown, Babylon reconsider multimillion-dollar contract after theft charges

Smithtown Town officials are considering canceling a multimillion-dollar contract with a Bay Shore carting firm charged with stealing more than $200,000 worth of recyclable paper from the town.

Town officials will meet this morning in private executive session at Town Hall to discuss their legal options, including termination of Jody Enterprises Inc.'s contract to collect paper and cardboard.

Meanwhile, Babylon Town officials will hold a public meeting at 9 a.m. Tuesday at Town Hall on the carter's pending deal to collect trash from town residents. Suffolk County District Attorney Thomas Spota last month said he believed company officials "provided false information" and hid information from Babylon during the contract bid process.

The company came under scrutiny last month when two employees were charged with diverting recyclable paper to a West Babylon salvage firm, rather than delivering it to Smithtown's recycling plant in Kings Park.

The employees -- manager of operations William Stegemann and field supervisor Michael Dalessandro -- have been fired, said Vincent Messina, an attorney for the company. Company officials have said Stegemann and Dalessandro acted independently in the Smithtown case and that Stegemann had only a verbal contract with the company to supervise operations.

Jody Enterprises earlier this year was awarded a 10-year contract to collect trash in Babylon starting Oct. 1. Messina said Friday the company is "ready, willing and able" to fulfill the contract. He declined to comment on the Smithtown pact.

Stegemann, 55, of Lindenhurst, and Dalessandro, 43, of East Patchogue, pleaded not guilty Aug. 23 to grand larceny. Dalessandro pleaded not guilty to possession of stolen property. Spota said the pair sold paper and cardboard for $400 to $450 per truckload to DeMatteo Salvage Co., of West Babylon. Smithtown could have sold the waste paper to paper mills for between $1,000 and $1,200 per truckload, Spota said.

Joseph DeMatteo, 72, of West Babylon, co-owner of DeMatteo Salvage, pleaded not guilty to grand larceny. The two companies also face grand larceny charges.

Smithtown officials said Jody Enterprises earns $2.15 million annually to collect paper recyclables in two of the town's five garbage districts. To terminate the deal, which expires Dec. 31, 2013, the town might have to bring charges against the carter in a hearing and solicit bids for a contract to take over its routes, town officials said.

Brookhaven, Huntington and Islip officials said last week they would review the company's work in those towns.

With Denise Bonilla, Sophia Chang and Deborah Morris