Former housing authority executive director sentenced in embezzlement scheme

On August 7, 2024, New York State Comptroller Thomas P. DiNapoli, Jefferson County District Attorney Kristyna S. Mills, the U.S. Department of Housing and Urban Development, Office of the Inspector General (HUD OIG) and the New York State Police announced that on August 6, 2024, former West Carthage Housing Authority Executive Director Jan Hoffman was sentenced for a scheme that allowed her to steal over $48,000 in WCHA funds. 

Hoffman was sentenced to serve five years’ probation. The sentencing of Hoffman's mother, Katherine (Katie) Pais, who pleaded guilty to aiding in and concealing the scheme, was adjourned to June 2, 2025.

Following their June 3, 2024 guilty pleas and prior to sentencing, the pair paid back $48,930 in restitution to the West Carthage Housing Authority.

“Hoffman and Pais betrayed the public trust in their scheme to steal over $48,000 in funds meant to support seniors and people with disabilities residing in the West Carthage Housing Authority,” DiNapoli said. “I thank Jefferson County District Attorney Kristyna S. Mills, the HUD Inspector General, and the State Police for partnering with my office to hold them accountable for their crimes.”

“The defendants took advantage of their position and violated the public trust by defrauding HUD-assisted housing programs of scarce taxpayer dollars intended to provide housing to individuals and seniors with disabilities," said Special Agent-in-Charge Vicky Vazquez with the U.S. Department of Housing and Urban Development, Office of Inspector General.  “Today’s sentencing demonstrates HUD OIG’s steadfast commitment to working with our prosecutorial, law enforcement and oversight partners to aggressively pursue those who engage in activities that threaten the integrity of HUD programs.”

New York State Police Superintendent Steven G. James said, “This sentencing should serve as a reminder that those who manipulate innocent victims will be brought to justice. Our joint investigation determined that the suspects in this case violated the public trust by circumventing financial accounts intended to fund safe housing for individuals. I thank the Comptroller’s Office, Jefferson County District Attorney’s Office, U.S. Department of Housing and Urban Development and Office of the Inspector General for their partnership in this case.”

Hoffman served as the executive director of the West Carthage Housing Authority, a government-funded apartment complex for low-income senior citizens and people with disabilities, from 2016 to 2021. Pais, Hoffman’s mother, was hired as a vendor to act as an accounts payable bookkeeper at the housing authority from 2016 to 2020.

Based upon an anonymous tip, DiNapoli’s Office and the HUD OIG commenced an investigation of all monies controlled by Hoffman and found that she had been making personal purchases with housing authority funds since 2016, her entire tenure as executive director. In total, Hoffman stole over $48,000 from the authority using its financial accounts and credit lines to pay unauthorized personal expenses, including retail and grocery purchases, and to fund her and her family’s personal cell phone expenses. She also submitted over $1,000 in additional false reimbursement claims. 

Through her role as the accounts payable bookkeeper, Pais was responsible for reviewing claims and preparing checks for payment. Pais abused her position in order to facilitate her daughter’s theft by making the illicit payments and then falsifying authority records to conceal her daughter’s crimes. 

Hoffman was sentenced before Judge David Renzi in Jefferson County Court.

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Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 8th Floor, 110 State St., Albany, NY 12236, or by filing a complaint online at https://www.osc.ny.gov/investigations.

New York State municipal and school district audits posted

On August 7, 2024, New York State Comptroller Thomas P. DiNapoli announced the following local government and school audits were issued.

Newark Central School District – Employee Benefits (Ontario County)  District officials did not always accurately calculate separation payments and did not ensure an independent review of separation payment calculations was performed. Therefore, calculation errors went undetected and resulted in erroneous and missed payments. Of the 41 employees reviewed, 14 separation payments totaling $66,036 were not calculated correctly, which resulted in errors totaling $20,157. The audit identified that four employees were not paid separation payments totaling $16,230, seven employees’ separation payments were overpaid by a total of $3,770 and three other employees’ separation payments were underpaid a total of $157.

Lindenhurst Union Free School District – Collections (Suffolk County)  District officials did not ensure that funds collected from all recreational and educational programs were properly recorded, deposited and reported. As a result, there was an increased risk of improper accounting of and potential theft of collections without detection. Auditors reviewed $311,876 collected by the business office from five district recreational and educational programs and determined that in-person collections totaling $130,568 were not recorded in a collection log. Employees made 25 deposits totaling $29,639 between 11 and 26 days after district programs recorded receipts.

City of Yonkers – Separation Payments and Health Insurance Buyouts of Yonkers City School District Employees (Westchester County)  City officials did not always ensure district employees’ separation payments and health insurance buyouts were accurate. Officials also did not establish procedures to help ensure that calculations were accurate, reviewed or authorized. As a result, certain employees did not receive separation payments and health insurance buyouts in accordance with contractual agreements. Of the 46 separation payments reviewed, totaling $451,298, nine had calculation errors totaling $1,630. One former employee, as well as the estates of three former employees, may have been entitled to separation payments totaling $23,937 that they did not receive. Of the 30 health insurance buyout payments reviewed, totaling $200,440, auditors determined 12, totaling approximately $87,300, did not have the required proof of insurance on file. Auditors also found buyout payments made to 10 employees had calculation errors totaling approximately $33,203.

Lewis County – Purchase Cards  Auditors reviewed 366 purchase card charges totaling $229,635 and determined the charges were for appropriate purposes; however, charges were not properly approved and supported and did not follow county policies. Although prior approval is required by the county’s purchase card policy, 238 online purchases totaling $189,852 did not have supporting documentation uploaded into the financial system showing the department head’s approval prior to the purchases being made. In addition, although the county’s procurement policy required verbal or written quotes, 52 charges totaling $142,684 did not have evidence of verbal or written quotes. The county could have potentially saved approximately $4,800 in travel expenses and sales tax. Additionally, the third-party purchase card vendor directly withdraws the monthly payments from the county’s bank account without the treasurer’s authorization.

City of Rensselaer – Accounting Records and Reports (Rensselaer County)  City officials did not maintain complete, accurate or timely accounting records. As a result, the reports the council received were not sufficient to allow them to effectively manage financial operations and capital projects. General ledger balances were inaccurate during each year and there were significant deficiencies with the city’s accounting records. Interfund receivables and payables did not reconcile, varying between $266,560 and $2.2 million, and transactions were not entered in a timely manner. In addition, bank reconciliations were not prepared in a timely manner or clearly documented, and discrepancies, including a variance where the reconciled bank balance for one bank account was $2.9 million less than the accounting records, were not explained. Independent audit reports were not timely and identified deficiencies in internal control.

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Not-for-profit organization's Freedom of Information [FOIL] request denied under color of the statutory privacy exception set out in FOIL

Petitioner, a not-for-profit corporation, made a request pursuant to the Freedom of Information Law ([FOIL (Public Officers Law Article 6)] seeking "information for each Jefferson County employee who is currently employed in a position covered by a collective bargaining agreement with CSEA/AFSCME Local 1000" including the employee's name, gender, public office address and certain other employment information. The County Administrator denied the request pursuant to Public Officers Law §§87(2)(b) and 89(2)(b)(iii) as "an unwarranted invasion of personal privacy," because the "requested information [was] not relevant to the employees' performance of their official duties and would be used for fund[-]raising or solicitation purposes." The Plaintiff appealed the Administrator's decision. Supreme Court granted Plaintiff's petition.

The Appellate Division opined that although "FOIL is to be liberally construed and its exemptions narrowly interpreted so that the public is granted maximum access to the records of government," the exemptions contained within FOIL must "be given their natural and obvious meaning where such interpretation is consistent with the legislative intent and with the general purpose and manifest policy underlying FOIL ... When presented with a question of statutory interpretation, a court's primary consideration is to ascertain and give effect to the intention of the [l]egislature".

Noting that the term "solicitation" is not defined in the Public Officers Law, the Appellate Division agreed with the County Administrator that, under the circumstances,  Petitioner's FOIL request was for solicitation purposes within the meaning of Public Officers Law §89(2)(b)(iii).

"Solicitation" is a word of "ordinary import," and thus it should be given its "usual and commonly understood meaning" (see Nadkos, Inc., 34 NY3d at 7). Black's Law Dictionary defines "solicitation" as "[t]he act or an instance of requesting or seeking to obtain something; a request or petition," and also defines the term as "[a]n attempt or effort to gain business" (Black's Law Dictionary [12th ed 2024], solicitation). Merriam-Webster defines "solicit" as, inter alia, "to make petition to," "to approach with a request or plea," or "to urge" (Merriam-Webster.com Dictionary, solicit).

The Appellate Division, noting that Plaintiff' states in its brief on appeal that it "contacts public employees for the purposes of its educational mission through a project that it calls Opt-Out [from membership in an employee organization] Today". Finding no indication that Plaintiff "intends to use the names to, for example, expose governmental abuses or evaluate governmental activities" and "[if] anything, it is precisely because no governmental purpose is served by public disclosure of this information that section 87(2)(b)'s privacy exemption falls squarely within FOIL's statutory scheme".

Accordingly, the Appellate Division held that Supreme Court "erred in concluding that the statutory privacy exemption under Public Officers Law §89(2)(b)(iii) does not apply" and concluded that Supreme Court should have dismissed the petition on that basis and modified Supreme Court's judgment.

Click HERE to access the Appellate Division's decision posted on the Internet.

Indirect threats made to another individual may support filing disciplinary charges against an employee making them

New York City Office of Administrative Trials and Hearings Administrative Law Judge [ALJ] Tiffany Hamilton recommended a 60-day suspension for a correction officer [CO] who failed to cooperate with and threatened police officers during a traffic stop.

CO was off-duty when she was pulled over for speeding. The ALJ found CO failed to obey the officers’ directives to promptly hand over her driver license and to step out of the vehicle. During the traffic stop, CO was on the phone and made statements such as, “They lucky I don’t have a firearm” and “Just give me the ticket, before I slap one of them.”

Judge Hamilton rejected CO's argument that these statements were not threats because they were not directed at the officers, holding that indirect statements made in the presence of the intended recipient can constitute a threat for the purposes initiating disciplinary action. 

Noting that it is well-established that an agency may discipline an employee for off-duty misconduct, the ALJ explained that "to do so, the agency must first establish a nexus between the alleged off-duty misconduct and the employee’s job duties". Judge Hamilton found "a sufficient nexus between a correction officer’s duties and the CO's failure to cooperate with police instructions" to conclude that the employer proved that the CO violated the employer's "Rules and Regulations" by failing to cooperate with NYPD officers by refusing to promptly present her driver's license or to step out of her vehicle as directed.

Click HERE to access Judge Hamilton's decision and recommendation posted on the Internet.

Imposing multiple penalties on an employee found guilty of disciplinary charges

The Appellate Division unanimously confirmed, without costs, the Appointing Authority's finding the Plaintiff  guilty of a disciplinary charge that he "engaged in misconduct against a female staff member that constituted sexual harassment" and the penalty imposed: a "six-month probationary term and suspension without pay for five days".

Concluding that the Appointing Authority's decision was supported by substantial evidence and that hearsay evidence is admissible in administrative proceedings and "if sufficiently relevant and probative may constitute substantial evidence", the Appellate Division sustained the Appointing Authority's findings and decision, citing People ex rel. Vega v Smith , 66 NY2d 130, and Matter of Gray v Adduci , 73 NY2d 741. 

The court found that the hearsay testimony at the hearing was relevant and probative on the charge that Plaintive engaged in misconduct against a female staff member that constituted sexual harassment. 

Although the decision does not report the relevant statutory authority for the disciplinary action taken against the Plaintiff, it should be noted that a collective bargaining agreement may authorize the imposition of multiple disciplinary penalties in a disciplinary action. With respect to disciplinary actions initiated pursuant to §75 of the New York State Civil Service Law, however, the courts have held that "the imposition of multiple penalties was improper", noting Civil Service Law §75.3 provides for a choice of penalties, thus prohibiting the imposition of more than one of the discrete penalties set out in the statute [see Matteson v City of Oswego, 186 AD2d 1017].

Imposing multiple penalties in a §75 disciplinary action, however, is possible where there are multiple offenses involved and the individual is found guilty of more than one of the charges alleged [see Wilson v Sartori, 70 AD2d 959].

Click HERE to access the Appellate Division's decision posted on the Internet.