WASHINGTON – Former Ramapo, N.Y. town supervisor Christopher St. Lawrence is arguing he should either be acquitted or retried because of errors by the judge made before and during the trial as well as prejudice from jurors who found him guilty of 20 counts of conspiracy and fraud in connection with municipal bonds issued by the town and an authority.
St. Lawrence is additionally alleging the U.S. Attorney’s Office for the Southern District of New York in Manhattan did not meet the required burden of proof to warrant a guilty verdict.
The verdict against St. Lawrence, which was reached in May, was the first conviction for securities fraud in connection with municipal bonds, according to Joon Kim, the acting U.S. attorney for the Southern District of New York. Each of the 11 counts of wire fraud and eight counts of securities fraud carry a maximum sentence of 20 years in prison while the single count of conspiracy carries a maximum sentence of five years in prison.
But St. Lawrence, through his lawyer, said that the events that led up to those guilty findings “were riddled with errors from the start,” including allowing the government to ask witnesses hypotheticals along the lines of what they would have done if they knew that St. Lawrence was lying.
“To almost every witness who was called during the first two weeks of trial, the government posed improper hypothetical questions, again and again, asking what the witnesses would have done if they knew that the defendant had lied or intentionally misrepresented financial information,” wrote Michael Burke, St. Lawrence’s lawyer. “During trial, defendant objected to every one of the improper hypothetical questions. But the court overruled the objections and allowed the witnesses to answer.”
The problem was compounded, according to Burke, because after allowing such questioning to go on for two weeks of the four-week trial, Judge Cathy Seibel finally questioned the admissibility of the government’s questions and decided to instruct the jury to disregard the previous improper testimony. However, Seibel did not agree with Burke’s subsequent argument that such a finding at that point in the trial should have been grounds for a mistrial.
“The jurors hear improper testimony day after day, witness after witness, for the first two weeks of a four-week trial, forever embedding the improper guilt-laden questions in their minds,” Burke wrote. “The prejudice could not be cured by the single belated instruction given only after the court overruled all of the defense objections and erroneously told the jury that the questions were proper. The prejudice that resulted from the government’s improper hypothetical questions was palpable.”
Burke also said there is evidence from a June 20 news interview of juror number five, Tony Nesci, that the jury deliberations were tainted by prejudice. Nesci insisted that some of his fellow jurors were “very vocal about their prejudice against St. Lawrence” and that the other jurors’ opinions weren’t based on law but instead on things like feelings that he looked guilty because he was smiling, according to Burke.
“These jurors that Mr. Nesci referenced prejudged the defendant and did not reach their determinations based on the application of the facts to the law but, rather, on impermissible biases that invaded the jury deliberations and denied Mr. St. Lawrence a fair trial,” Burke wrote.
The Department of Justice’s indictment of St. Lawrence, which led to the criminal case against him, largely mirrors a still-pending civil case the Securities and Exchange Commission filed against him and others associated with Ramapo at the time of the indictment. Aaron Troodler, a former official with the Ramapo Local Development Corp. that issued two of the 16 bonds associated with the alleged fraud, was also indicted but pleaded guilty to criminal securities fraud in March.
The DOJ found that Troodler and St. Lawrence lied to investors in the town’s and RLDC’s bonds, some of which were used to finance a minor league baseball stadium, in order to conceal the deteriorating state of Ramapo’s finances and the inability of the RLDC to make scheduled payments of principal and interest to bondholders.
Much of the fraudulent activity was allegedly designed to conceal Ramapo's deteriorating general fund, which faced deficits ranging between $250,000 and $14 million between fiscal years 2009 and 2014, according to the DOJ. As of August 2015, the town had more than $128 million in outstanding bonds that had been issued for various municipal purposes while the RLDC, which is owned by the town, had issued $25 million in bonds to pay for the minor league baseball stadium, according to U.S. attorneys.
The fraud preceded the construction of the baseball stadium, but the $58 million total cost of the stadium played a role in the town’s financial problem, U.S. attorneys said. They found that Ramapo paid more than half the cost, even though the town’s citizens had voted againstpaying for the stadium through bonds in a 2010 referendum and St. Lawrence publicly stated that no public money would be used.
The cover-up, among other things, involved a $3.08 million receivable due from the RLDC that was in the town’s financial statements and a $3.15 million Federal Emergency Management Agency receivable, the DOJ said. The $3.08 million receivable was to have come from the sale of a 13.7 parcel of land known as the Hamlets to the RLDC that never happened and the $3.15 million was for a FEMA grant that was never received.
Burke said that the DOJ did not have enough evidence to use those receivables as examples of fraud. St. Lawrence maintains that the town’s financial statements for the relevant years made clear that the $3.08 million was payable from a transfer from the RLDC for a parcel known as “Elm Street” and that the $3.15 million was clearly marked as an estimate that the town could not affirmatively say it would be receiving.
The DOJ also said that St. Lawrence made more than $12 million in transfers from Ramapo’s ambulance fund to the general fund from 2009 to 2014. The two funds had different tax bases and such transfers should only have been made as loans, according to the indictment.