Huntington Town Councilman Mark Cuthbertson talks about his business ties...

Huntington Town Councilman Mark Cuthbertson talks about his business ties to Gary Melius in his Huntington office Aug. 27, 2014. Credit: Newsday / J. Conrad Williams Jr.

Huntington Town Board member Mark Cuthbertson held three court-appointed positions in which he worked with Robert Fonti, a property management consultant for the town and chairman of the Huntington Housing Authority, that he did not disclose.

Cuthbertson said he was paid a total of $10,390.36 and Fonti $5,750 for their work. In one case, Cuthbertson was the receiver in a legal dispute and Fonti the property manager. In the other cases, Cuthbertson was counsel for Fonti, who had been appointed receiver.

Fonti, president of Huntington-based Vincent James Management, has worked as a consultant for the town for 17 years. His contract, which the town board approved in January, calls for him to be paid as much as $62,400 for his work. He said he does not know how much he has billed the town this year.

Cuthbertson, a board member since 1998, said in an interview that he didn't disclose the receivership relationships to the town board before voting to approve Fonti's contract because "I did not believe disclosure was required at the time."

Board finds no violation

Huntington's ethics board on Oct. 20 found no "technical ethical violation" in a vote Cuthbertson made in favor of a zoning change that allowed a condominium development proposed by Oheka Castle owner Gary Melius. Cuthbertson had not disclosed before the vote that he was working with Melius and Melius' daughter on two court-appointed receiverships.

The appointments on commercial properties in foreclosure paid Cuthbertson, Gary Melius and Kelly Melius more than $284,000 in fees and expenses, court filings show. The Cuthbertson-Melius receivership relationship was revealed in a Newsday investigation.

The ethics board ruled that while Cuthbertson had done nothing wrong, the smart approach going forward would be to disclose those relationships. Cuthbertson echoed that sentiment in a statement he released about the board's ruling.

He also said that given that decision by the ethics board, "it would have been better to disclose" the Fonti relationship.

Cuthbertson said he had forgotten about the Fonti receiverships and remembered them after Fonti alerted him that Newsday was asking about them.

"Two were very inconsequential" and one is identical to the receivership in the Melius relationship that the ethics board had already ruled posed no conflict of interest, Cuthbertson said.

In a private email subsequently circulated among Huntington and state officials, and obtained by Newsday, Cuthbertson sought advice on whether he should disclose the Fonti receiverships. Cuthbertson said he sent the email to lawyer friends to ask what the content and timing of a public statement should be.

"The consensus was it's advisable to issue a statement," he said. "But before I could confirm dates and amounts, Newsday called asking for a quote."

Ethics board chairman Howard Glickstein, a former law school dean who worked in the U.S. Justice Department, said he could not comment on an issue that is not before the board.

"I know Mark [Cuthbertson] has been looking into this and he's continuing to do so," Huntington Town Supervisor Frank Petrone said about the receiverships.

Cases with Fonti

In March 2011, Fonti was named as receiver in Hypothecator Realty Corp. v. J&J Sons Real Estate Corp. et al -- a case in State Supreme Court in Suffolk County. Cuthbertson, appointed attorney for the receiver that year, said he was compensated $3,293.51 and that Fonti has not been paid. Cuthbertson also was appointed that year.

In October 2011, Cuthbertson was appointed receiver, and sought and was granted court approval for Fonti as a property manager in 115 Meacham Funding Court v. 115 Meacham Avenue Corp. et al., in State Supreme Court in Nassau County. Fonti said he was paid $2,400. That money was paid from the rent collected in the receivership. Cuthbertson was paid $6,096.85.

In November 2012, Cuthbertson again worked with Fonti, who was the receiver in Community National Bank v. Griffin Real Estate LLC et al., also in State Supreme Court in Suffolk County. Cuthbertson said a court order mandated Fonti be paid $3,350. The court appointed Cuthbertson as counsel to Fonti and set his fee at $1,000.

Fonti's duties as consultant to Huntington include advising the town attorney's office on issues involving real estate owned, leased or claimed by the town. The town board votes yearly on the consulting contract.

Fonti has been appointed by the town board to five-year terms on the Huntington Housing Authority since 2000 and was elected chairman by authority members in 2011. Both positions are volunteer.

The housing authority manages 40 units of public housing in Melville and administers the federal housing choice voucher program known as Section 8 within the Town of Huntington.

Fonti said the issue of whether Cuthbertson's relationship in the receiverships represents a conflict of interest is "not a question for me" to determine.

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