Overcast 35° Good Afternoon
Overcast 35° Good Afternoon

Steve Schlesinger ordered to give full accounting of $11M charity he was appointed by court to manage

Steven Schlesinger is pictured on Sept. 22, 2010.

Steven Schlesinger is pictured on Sept. 22, 2010. Photo Credit: Joseph D. Sullivan

A Nassau County Surrogate's Court judge has ordered Garden City attorney Steven Schlesinger, who is under investigation by the state attorney general's office for his court-appointed management of an $11 million foundation, to produce a full accounting of the charity's finances by early December.

During a hearing Oct. 13 in Mineola, Judge Edward McCarty III gave Schlesinger a firm Dec. 10 deadline to file an up-to-date financial statement of the Kermit Gitenstein Foundation, warning that he would not grant any time extensions.

"On Dec. 10th, I must see that report," McCarty said. "This court must maintain the confidence, the integrity and the standing of this court with regard to the administration of the Kermit Gitenstein Foundation."

Gary Lewi, a spokesman hired by Schlesinger's Garden City law firm, Jaspan Schlesinger LLP, said work on preparing the accounting has already begun.

"There's a tremendous amount of paperwork to be gathered, and we're in the throes of doing that," Lewi said.

McCarty's order follows Newsday's August investigation that showed Schlesinger, an influential attorney with the Nassau County Democratic Party, steered foundation money to organizations where he has personal connections.

They include a $250,000 gift to a nonprofit run by his friend, political power broker and Oheka Castle owner Gary Melius; $50,000 to a charity run by another friend, former Sen. Alfonse D'Amato; and $1 million to the Jacob D. Fuchsberg School of Law at Touro College, where Schlesinger is a member of the board of directors.

The latest accounting should show where all charitable grants and expenses from the Gitenstein Foundation have been directed. The last accounting, which was completed in 2008, showed the foundation was worth about $10 million. The foundation ultimately grew to more than $11 million, court records show.

McCarty criticized the media during the hearing and called reports about the Gitenstein Foundation "factually wrong and without substance." He did not elaborate and has not requested a correction or clarification from Newsday. McCarty declined an interview request for this story.

McCarty was also critical of the state court's inspector general for fiduciary appointments, whose office investigates nonjudicial employees and state courts contractors for criminal activities, conflicts of interest and incompetence. McCarty said the office has not yet produced a report despite informing him six months ago of an ongoing review of the foundation court file.

McCarty said he had inspector general training in the military and that issuing "expeditious reports" was a top priority for any inspector general.

"This court has waited for the expeditious review by the office and has not heard a word from them in, literally, six months," McCarty said. "With the lagging of their report, I have to take some action."

David Bookstaver, spokesman for the state courts system, said there's no guarantee that McCarty would see a completed inspector general report on the Gitenstein Foundation.

"Inspector general reports are not customarily public," Bookstaver said. "As for whether the judge in this case has a right to see it, that remains an unanswered question."

Died with no heirs

Shirley Gitenstein died in 2007 at age 85 as the last trustee of her family's foundation, which had primarily donated money to Jewish organizations and toward health care. She left behind no heirs, and her will did not name an executor.

Following Gitenstein's death, the Nassau County public administrator joined with the attorney general's office to have the Surrogate's Court appoint a permanent receiver of the Gitenstein Foundation. The court chose Schlesinger.

Schlesinger's decision to send the foundation's money to Melius' Elena Melius Foundation came two days before Schlesinger held his February 2014 wedding at Oheka Castle, Melius' Gold Coast estate. According to a $75,000 check Schlesinger provided to Newsday, Schlesinger did not pay for the wedding until five months after it occurred and didn't produce an itemized receipt when Newsday asked for one.

Schlesinger issued the gift to Melius' charity four days after Melius was wounded by a gunman in a case that remains unsolved.

Earlier this month, Newsday reported that the attorney general's Charities Bureau had issued subpoenas to charities that received grants from the Gitenstein Foundation. Those charities included Melius' foundation and the Armand and Antoinette D'Amato Family Foundation, headed by D'Amato, which received $50,000 for the construction of a children's splash park in the Village of Island Park.

Two of Long Island's largest health care networks -- North Shore-Long Island Jewish Health System and Nassau Healthcare Corp. -- were also issued subpoenas as part of the attorney general's investigation into Schlesinger's handling of the Gitenstein Foundation's money.

North Shore-LIJ received $4.2 million from the Gitenstein Foundation for the establishment of a medical school with Hofstra University. Schlesinger was once an associate board member at North Shore-LIJ.

Schlesinger also gave a $1.2 million gift to Nassau Healthcare Corp., which runs Nassau University Medical Center, in 2009 to pay for three digital mammography units. Although the court file does not include explicit documentation of that donation, it is referenced in the Gitenstein Foundation's tax records and an NUMC news release.

Schlesinger wasn't in court during the hearing but had an attorney from his law firm represent him during the hearing.

"We're ready, willing and quite able to account for the time period ordered by the court," Michael P. Ryan said. "We're very confident that the accounting will show that it has been administered fairly, justly, accurately and appropriately."

More news