NEWSDAY / THOMAS A. FERRARA
NEWSDAY INVESTIGATION
B2
CHAPTER 1
ONE MAN’S
RISE SHINES
LIGHT ON LI’S
CORROSIVE
SYSTEM
BY GUS GARCIA-ROBERTS
AND SANDRA PEDDIE
sandra.peddie@newsday.com
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
S
hortly after noon on the nearfreezing day of Feb. 24, 2014,
real estate developer Gary
Melius started his Mercedes-Benz in
the valet parking lot behind Oheka
Castle, the palatial Huntington hotel
and event center he owns and calls
home.
A masked man crept from a Jeep
Cherokee parked nearby, put a pistol
to the driver’s window and pulled the
trigger, wounding Melius in the left
forehead.
In his fragmented recollection,
Melius heard a ringing in his ear and
staggered to the castle, where he
swiped himself in, put a wet towel to
his head and asked his daughter to
drive him to a hospital, later bragging
that he “showed no fear.”
His still-unsolved shooting was
treated like the attempted assassination of a statesman. Suffolk police
officers assumed an imposing guard
at the snow-specked castle while a
roster of Long Island’s most influential officials at the time visited him at
North Shore University Hospital in
Manhasset.
The visitors included the two
county executives, Suffolk’s Steve
Bellone, a Democrat, and Edward
Mangano, a Republican; Reps. Peter
King, a Republican, and Steve Israel, a
Democrat; former Freeport Mayor
Andrew Hardwick; acting Nassau
Police Commissioner Thomas
Krumpter; Nassau Sheriff Michael
Sposato; Nassau’s top administrative
judge, Thomas Adams; Suffolk
Supreme Court Justice Thomas Whelan; and, overshadowing them all in
wide-ranging influence, former Sen.
Alfonse D’Amato.
The attempted murder in broad
daylight of a developer with powerful
connections, captured by surveillance
footage on his castle grounds, briefly
made national news. It loomed larger
in Long Island’s political world.
Gary Lewi, D’Amato’s former press
secretary who has also represented
Melius, compared the incident with
“Robert Moses being gunned down in
the parking lot of Jones Beach.”
However overblown the link to the
legendary master builder, Melius’
broad reach over Long Island politics,
This project was reported and written by Gus Garcia-Roberts, Keith Herbert, Sandra Peddie
and Will Van Sant with contributions from Aisha Al-Muslim, Matt Clark, Paul LaRocco,
Maura McDermott and Adam Playford. It was edited by Martin Gottlieb and Alan Finder.
law enforcement and civic life has in
many ways been unparalleled.
With a mix of canniness, unpolished charm and threats and taunts,
Melius, now 73, has transformed
himself from a teenage street tough
out of West Hempstead to owner of
the castle that became Long Island’s
unofficial political clubhouse. His
networking has been prodigious,
allowing Oheka to flower. He has
been the host at years of law enforcement parties at the castle, where,
guests said, cops and FBI agents ate
and drank for free.
His foundation has donated more
than $2.8 million to roughly 500
mostly local charities. In addition,
Melius, his family, businesses and
employees have contributed at least
$1.3 million to politicians, several of
whom were behind governmental
actions worth millions to him.
Never a Democratic or Republican
functionary much less a party boss,
Melius made his way from the outside in — as a player with powerful
friends and a practical understanding
of the day-to-day workings of Long
Island’s cozy, transactional politics.
As such, his life reveals a detailed
picture of how the system functions.
It is a system facing crisis. For
decades, scandal has been a steady
current in Long Island politics, but
last year it blew out fuses. By Newsday’s count, in 2017, about 40 public
officials, politicians and cops and
other government workers were
indicted, imprisoned, or forced from
their jobs by ethical transgressions
and scandals. That capped a 10-year
period with more than twice that
number of cases.
Among them was Mangano, whom
Melius has described as “the best
political guy” and whose federal trial
is scheduled to begin in March. He is
charged with giving government
contracts to a restaurateur whose
favors included employing his wife,
Linda, as a food taster for a total of
$450,000 over more than four years;
prosecutors allege that she performed
little or no work. Mangano and his
wife have pleaded not guilty.
They also include Edward Walsh,
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NEWSDAY INVESTIGATION
SCPD
One man’s rise shines light on LI’s corrosive system
Suffolk’s longtime district attorney,
Thomas Spota, who, with the head of
his anti-corruption unit, was charged
with conspiracy and obstruction of
justice, accused of helping Burke in
the cover-up. Spota, who headed the
still-unsuccessful investigation into
Melius’ shooting, and his corruptionunit chief, Christopher McPartland,
have pleaded not guilty.
Ambrosino, Venditto and the other
Oyster Bay officials have also pleaded
not guilty.
Federal investigators have looked
into matters involving Melius: One
concerning fees that he and associates collected from state court
appointments and another involving
the Elena Melius Foundation, which
is named for his mother. But Melius
A scene from a portion of surveillance
video that shows the February 2014
shooting of Gary Melius.
has never faced political corruption
charges and is adamant about his
integrity. Three years ago, he said,
FBI agents hauled 180 boxes out of
Oheka. The FBI has declined to comment.
“I haven’t done one thing wrong,”
Melius said in a meeting with Newsday editors last April. “The federal
government — three years to investigate me — you know what they came
back with? Nothing.”
“I am a very honorable person,” he
continued. “Whatever I say, I do the
CONTINUES on B5
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
The year’s indictment roster included John Venditto, who resigned
as Oyster Bay supervisor between his
two corruption indictments, the
second of which also ensnared several past and then-town officials;
Gerard Terry, who while head of
North Hempstead’s Democrats held
down five government jobs and
pleaded guilty to not paying income
taxes on them; and Hempstead Councilman Edward Ambrosino, a prominent Republican who was indicted on
charges of failing to pay taxes on his
earnings as an attorney for the Nassau Industrial Development Agency
and the Nassau Local Economic Assistance Corp.
Capping the year was the indictment and subsequent resignation of
newsday.com
the influential former chief of the
Suffolk Conservative Party, who is
serving a 2-year sentence for theft of
government funds and wire fraud for
golfing, gambling and doing political
work when he was supposed to be on
the job at the Suffolk County jail. The
charges included an instance in
which prosecutors said Walsh provided support to Melius at a private
business meeting when he should
have been working at the jail.
Former Suffolk Police Chief James
Burke is serving 46 months for pummeling an addict who stole his porn-filled
duffel bag and trying to cover up the
beating. In arguing for a stiff sentence,
federal prosecutors noted that Burke
bragged about his actions to fellow
cops at an Oheka Christmas party.
Former Oyster Bay Supervisor
John Venditto
Former Suffolk Police Chief
James Burke
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
sandra.peddie@newsday.com
Long Island was particularly hard hit
by corruption scandals in 2017, with
about 40 public officials and government
employees indicted, imprisoned or
pushed from office by ethical transgressions and scandals.
This was the culmination of a decade
in which more than twice that number of
officials, cops and other workers were
tarred in episodes that short-circuited
the careers of such powerful leaders as
former State Senate Majority Leader
Dean Skelos, former Nassau County
Executive Edward Mangano, former
Suffolk District Attorney Thomas Spota,
former Oyster Bay Supervisor John
Venditto and former Suffolk Police Chief
James Burke.
Mangano, Spota and Venditto are
awaiting trial and maintain their inno-
cence.
The tally seemed to be building steam
until it exploded last year. Even judges
have been investigated by other agencies, publicly disciplined or dismissed on
corruption-related charges.
The cost to taxpayers in waste, graft
and confidence in government runs high,
but it is not only they who pay a price.
Honest government workers across
Long Island — police officers, managers
and civil servants of every stripe — have
had to carry out their duties in environments tainted by wayward behavior and
the bias of outsized political considerations.
In some ways, it’s a product of a New
York state of mind.
The state ranks highest in the country
in the percentage of state legislators
convicted of public corruption over the
last decade, said Jeffrey D. Milyo, a
University of Missouri economist who
ANTHONY LANZILOTE
HOWARD SCHNAPP
Former Suffolk County Conservative
Party leader Edward Walsh
High-profile year of political corruption
BY SANDRA PEDDIE
Former State Senate Majority Leader
Dean Skelos
ED BETZ
STEVE PFOST
Hempstead Town Councilman
Edward Ambrosino
HOWARD SCHNAPP
Former Nassau County Executive
Edward Mangano
HOWARD SCHNAPP
Former Suffolk District Attorney
Thomas Spota
JAMES CARBONE
NEWSDAY / JOHN PARASKEVAS
NEWSDAY INVESTIGATION
B4
has analyzed prosecutions nationwide.
He said similar data for prosecutions of
local officials is not readily available.
Dick Simpson, a University of Illinois
political scientist and former Chicago
alderman, said corruption endures
where machine politics is entrenched.
The machines thrive as long as they win
elections and control government, ensuring patronage jobs and contracts for the
party faithful, as well as opportunities for
nepotism. A Newsday investigation last
year identified more than 100 current or
ex-Nassau County elected officials, top
appointees or political leaders with at
least one family member on public
payrolls at some point since 2015.
“Some states in the Midwest have
never had a culture of corruption,” Simpson said, citing Wisconsin, Minnesota
and Iowa. “If they have one scandal,
involving one legislator, it’s a big deal.”
On Long Island, in one town alone —
Former North Hempstead Democratic
Party leader Gerard Terry
Oyster Bay — six current and former
officials and contractors and a top political leader were charged with crimes last
year.
The plethora of indictments and
convictions raises a deeper question
about whether, rather than being discrete incidents, they are manifestations
of a malignant system that spawns an
outsized degree of wrongdoing.
A corrupt culture reinforces itself, said
Harvard Law School Professor Matthew
Stephenson, who studies public corruption and runs the Global Anticorruption
Blog.
“When organizations have reputations
for corruption, they tend to attract and
retain corrupt people,” he said. “Individuals of high integrity don’t want to work in
a corrupt environment, while those who
are happy to bend or break the rules for
their own gain will be attracted to such
organizations where such behavior is
known to be tolerated or encouraged.”
In other words, he said, “You might
even feel like a sucker if you’re a guy who
follows the rules.”
B5
NEWSDAY INVESTIGATION
best I can and nobody got robbed
from me.”
Melius was asked in April if he
would be interviewed substantively
by Newsday reporters for this project.
He was asked again on Feb. 13 if he
would consent to an interview. He
responded that he would first want to
read all of the stories. Newsday’s
policy is not to do so.
This past November, voters elected
several new office holders who carried the banner of reform, including
Nassau County Executive Laura Curran, Suffolk County District Attorney
Timothy Sini and Hempstead Town
Supervisor Laura Gillen. Melius’
half-century-long rise shows how
broad and entrenched the system is
and how hard it may be to exact
lasting change.
But that can dissolve on a dime,
and in one infamous case his fierce
focus led to the arrest of a man with
learning disabilities, Randy White,
who unwittingly wound up on the
wrong side of one of Melius’ political
schemes.
Often overshadowed by his restoration of the resplendent Oheka and his
munificent charitable donations, this
more troubling side surfaces most
tellingly in Long Island’s public arena.
Benefits of the system
Former Freeport Mayor Andrew
Hardwick visits Melius at North Shore
University Hospital in Manhasset.
eventually paid White a $295,000
settlement — and was later forced
out for doing so. Freeport Village
Attorney Howard Colton filed a police complaint in 2009 alleging that
Melius threatened to have him indicted, citing Melius’ relationships
with the Nassau district attorney’s
office and its chief investigator.
Colton alleged they were acting as
Melius’ “private police force.”
! The Nassau and Suffolk leaders of
the influential Independence Party
worked as Oheka employees over the
years. Melius was named the party’s
“chief adviser” as part of an effort to
take the party national, and he and his
daughter reaped hundreds of thousands of dollars in appointments from
a judge whose political career was
resurrected by the party.
In the mix of Melius’ business
associates were: a Howard Beach car
thief whose son was killed in a mob
hit, a charismatic loan shark, and a
Japanese businessman widely reported to have ties to the Yakuza
crime organization.
Critical of media coverage
The incongruities in the arc of
Melius’ life have been plentiful, notably the juxtaposition of relationships with Long Island government
and law enforcement officials and
sporadic associations with unsavory
characters.
At a meeting with editors last
April, Melius criticized coverage of
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NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
Unfolding in records and interviews is something akin to an American dream success story, albeit of the
complicated, less sanguine variety
captured in novels such as “The
Great Gatsby.” There, the protagonist
emerges from obscure beginnings
with the help of questionable connections offered by his 1920s Jazz Age
circle and achieves a success captured in the grandeur of his North
Shore mansion.
Melius is a far cry from F. Scott
Fitzgerald’s glamorous, tragic protagonist. But for a half-century, Long
Island’s world of politics and power
has provided him an equivalent circle,
supplying connections, opportunities
and the playing field of a tumultuous
life, grand mansion included.
When Melius maneuvered within
Long Island’s bounds, he reaped
millions through zoning changes,
legal settlements, contracts and court
appointments. When he tried his luck
outside it, he often stumbled through
an assortment of failures, from a foray
into boxing promotion to trying to
partner in casino management upstate and more.
Those are stories in themselves,
but more importantly they point to
what was absent as Melius tried to
succeed on his own: the sustaining
power of Long Island’s political network.
Through Melius, Newsday’s investigation reveals the benefits that system can provide:
! Early on, a young Melius faced five
sets of criminal charges, but after he
hired a politically connected Long
Island lawyer, felonies morphed into
misdemeanors, near certain jail time
turned into light fines and probation,
probation got cut short, and his most
serious conviction was expunged.
! As Melius, his employees, businesses and family members were
contributing at least $1.3 million to
political campaigns, he was lifted out
of real estate problems at Oheka and
in Freeport through favorable government decisions worth millions. In
Freeport, Nassau County bought his
failing property based on a questionable valuation commissioned by the
county that was three times higher
than the property’s assessed value.
! As he feted cops and FBI agents at
Oheka, Melius became involved in
episodes that called into question the
integrity of law enforcement agencies
in which his friends held key positions. Melius championed the hiring
of Thomas Dale as Nassau police
commissioner. Later, he called Dale to
say Andrew Hardwick’s county executive campaign wanted to file a perjury
charge against Randy White, the man
with learning disabilities who had
testified in a case that threatened
Melius’ bid to influence the 2013
election. Dale had White arrested —
on grounds so suspect the county
newsday.com
As cops, reporters and an array of
Long Island power brokers massed
outside the hospital where doctors
were working to save Melius’ left eye,
his friends said they were mystified
by the attack.
“No one could think of anyone that
would want to kill Gary,” Steven
Schlesinger, a powerful Nassau Democratic Party lawyer told a television
reporter.
In many ways, the sentiment was
understandable. There are plenty of
campaign contributors who send
money to politicians, but few who go
puppy shopping with them, as Melius
did with Mangano.
At Oheka, he is known as an affable, self-effacing bon vivant, telling
jokes in a blunt cadence while wearing short sleeves that display faded
tattoos. And his private enjoyments
can be endearing. His fellow up-fromnothing mansion owner John Nasseff
fondly recalls dinners with the
Meliuses at his Minnesota home
where they enjoyed performances by
hired singers and magicians.
“To know him is to love him,” said
D’Amato after visiting Melius’ bedside.
But a far more complicated and
contradictory picture of Melius
emerges in Newsday’s extensive
examination.
The picture took shape through a
mosaic of sources: more than 500
interviews and tens of thousands of
pages of records. They include longoverlooked files that cover Melius’
early criminal career; documents
from more than 200 often rancorous
court cases with business partners,
neighbors, government agencies, and
even his dry cleaner; an investigation
by the National Indian Gaming Commission, a federal agency whose staff
recommended that Melius be found
unfit to run a casino; and a string of
business failures and gambling debts
that left his creditors with as little as
5 cents on the dollar.
The generosity is certainly there.
So is the likable persona recalled by
friends.
HOWARD SCHNAPP
A contradictory picture
NEWSDAY / DICK KRAUS
Ellen “Chickie” O’Meara in 1976.
GALASSO FAMILY
him in Newsday, which has published
articles about his foundation, receiverships he and his daughter were
awarded by judges, and other matters.
Melius last year accused Newsday
of unfairly attacking him, saying the
newspaper had featured him in 170
stories since he was shot — 16 on the
front page — that, he said, had exacted a toll on his business and family.
Also last year, Melius threatened a
Newsday reporter who worked on a
story about his effort to get the Nassau County Legislature to approve a
sewer hookup for a condominium
development at Oheka Castle.
He agreed to an interview at Oheka
in 2014 with Newsday investigative
reporters for this story but declined
to discuss many topics. Melius refused further substantive interviews
with team members, although he
answered some questions from a
Newsday business reporter last summer before a legal proceeding began.
“I am broke now, I mean I have lost
everything, thanks to the paper,” he
told the editors last April, explaining
his reticence to talk further. “I am
none of the things you have me down
as. I am not a power broker; I am a
nice guy.”
Melius’ life is quieter now and he
complained to Newsday editors of
the fallout from the shooting: seizures
and that he can’t drink, smoke cigars
or drive anymore.
“They only harpoon the whale
when he surfaces, and it’s true —
look what happened to me,” Melius
remarked. “I will never do that again,
getting shot in the head.”
As for the shooting investigation,
Justin Meyers, chief of staff for Suffolk County District Attorney Timothy Sini, said: “We wouldn’t discuss
an open investigation but I can assure
you it remains open and the police
department continues to pursue the
case.”
Fran Arello in the early 1970s.
NEWSDAY / RAYCHEL BRIGHTMAN
NEWSDAY INVESTIGATION
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
‘Troubled youth’
Melius’ Long Island story began
like many others in the 1950s, when
droves of city dwellers, many of them
Irish, Jewish or Italian, flooded what
had mostly been farmland, more than
doubling the Island’s population in
two decades. It amounted to a second
great migration by families that emigrated from Europe in the 19th and
early 20th century.
When Melius was in third grade,
his family, which included two sisters
and an older brother, moved from
Jackson Heights, Queens, to a small
home on West Hempstead’s Maplewood Avenue.
He would establish the multimillion-dollar Elena Melius Foundation
in honor of his mother, a daughter of
Italian immigrants whom he venerated. He has characterized his father,
a truck driver, as abusive, he once
told Newsday.
As described by his teenage sweetheart, Melius was the most charming
Marilyn Brown Ryder in April 2017.
rogue on the block. Marilyn Brown
Ryder, who dated him when she was
16 in 1960, remembers the handsome,
dark-eyed leader of a crew of troubleseeking boys, including her future
husband, Robert Ryder, who mostly
hung out at the neighborhood bowling alley. “They were the talk of West
Hempstead,” she recalled.
But while his friends looked for
fights, Marilyn Ryder described
Melius as something more, smart and
savvy and able to “B.S. anyone.”
Nonetheless, Melius said in a Newsday interview that he dropped out of
West Hempstead Junior High before
ninth grade.
In 1962, he and Robert Ryder were
arrested and charged with petty
larceny for stealing tires, according to
the staff findings of the National
Indian Gaming Commission, which
years later chronicled his criminal
history as it weighed his suitability to
manage a casino. The disposition of
those charges is unknown.
The next year they were busted for
a felony marked by ruthlessness and
the incongruous generosity that has
typified Melius.
Just short of his 19th birthday, he,
Ryder and two others “slapped,
choked and threatened with death” a
West Hempstead hitchhiker from
whom they stole $40, according to a
Newsday report. But the muggers left
their victim with $10 for carfare
home.
Melius pleaded guilty to felony
second-degree attempted grand larceny, according to the Indian commission memo. He was sentenced to up
to 5 years, with the penalty suspended, the memo stated, meaning he
served no time.
Melius has described his criminal
past as “colorful,” chalking it up to his
“troubled youth.” But criminal
records, court transcripts and interviews indicate that he graduated from
local hooliganism to more sophisticated schemes, one with organized
crime links.
Befriending an officer
By the early ’70s, Melius was stumbling through what he has called a
“whole list of failures,” such as Gary’s
Tree Service and Gary’s Pizza Oven,
and trying to build a modest contracting company called Eastport Construction.
Around this time, Nassau County
Police Officer James Mileo later
recalled, he pulled over Melius in
Manhasset for speeding.
Now in his 80s, Mileo told this
story from Florida: Melius talked fast,
quickly learned that the cop had
money woes, and offered him parttime work at Eastport, which Mileo
accepted after forgetting about the
speeding.
Mileo got to know his new boss,
and real estate records show that at
one point the cop deeded him a
house in Seaford. He recalled a day
when Melius picked him up at a job
and drove to a Brooklyn restaurant.
There, Mileo said, Melius joined a
man at a corner table whom the cop
recognized as Carmine “The Snake”
Persico, the Colombo crime family
boss whose foreboding, angular features were captured regularly in New
York tabloids.
After 10 minutes, Melius returned
to their table, Mileo said.
Mileo said he took the display as at
least partly for his benefit. “He
wanted to get me on the illegal side
of things,” he said.
Fran Arello, then a rookie with
Nassau police’s organized crime
squad, said that a Colombo-affiliated
informant reported that Mileo was
stealing construction equipment from
parkways and shaking down motorists with Melius’ help.
Arello recalled scoping out Melius’
contracting storefront in Valley
Stream before she donned a red wig
and jammed a tissue-wrapped microphone into the bosom of a tightfitting
dress one night in September 1971.
She drove a Cadillac convertible
down Roslyn Road, where her informant had set up Mileo by telling him
a heroin courier with a “very rich
father” would be driving by.
Mileo pulled over the Cadillac,
rifled under a floor mat and found
packets of milk sugar that passed for
the drug, Arello recalled. She said
Mileo offered to let her go for $15,000
and then released her to retrieve the
cash.
After collecting marked bills in an
envelope from detectives outside a
nearby bank, she went to a meeting
point across from a synagogue on
Roslyn Road where Melius, whom
Arello called the scheme’s “bagman,”
was waiting and took the cash, she
said. A short time later, he and Mileo
were arrested and charged with
felony grand larceny.
During the episode, there was
another person in the car: the mob
informant, who sat in the shotgun
seat.
She was a gangster with a bouffant
who ran a racket with three female
lieutenants and whom Arello remembered as foul-mouthed, funny and
smart, and also as someone who
would “shoot you in a heartbeat.” Her
name was Ellen “Chickie” O’Meara.
O’Meara was a cinematic figure
undiscovered by Hollywood. A product of private schools in Queens and
Long Island, she traced Mafia ties to
her grandfather, whom she described
in an interview as an associate of the
seminal mobster Vito Genovese.
Besides the Colombo family,
O’Meara told a reporter she also
worked for Gambinos. She had been
locked up dozens of times by 1970 for
offenses as diverse as lifting fur coats
and fixing college basketball games,
according to contemporaneous news
reports.
That summer, according to
O’Meara’s later testimony, her primary racket was an interstate theft
ring specializing in construction
equipment and Cadillacs. She ran it
with her three lieutenants and a crew
of male worker bees.
Word of the operation got around,
though, and shortly before the
Melius-Mileo busts, O’Meara was
quietly arrested and turned; her bid
for leniency put her in Arello’s Cadillac on Roslyn Road.
Cliff Schmidt, then the Nassau
Police Benevolent Association’s second vice president, recalled sitting
with Mileo in an interrogation room
and his heart breaking as the cop
owned up. “He was a great officer,”
Schmidt said of Mileo, who he believed was likely “entranced with
Melius.”
“I wish he would have never have
gotten involved with him,” he said.
More than four decades later,
B7
NEWSDAY / DICK YARWOOD
Weeks after Melius and Mileo were
arrested, federal and New York City
prosecutors moved on O’Meara’s
Gary Melius at Oheka in May 1987.
O’Meara and others detailed the
operation during a related federal
trial in Virginia against buyers of her
stolen haul. According to her testimony and others’, construction site
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
Testimony on car theft ring
entire ring, sweeping up 16 suspects,
including Melius again.
A New York Times account described the crew as an element of “a
much more potent faction of organized crime that operated in many
states.”
In 1971, Melius faced grim
prospects. At 27, he had been arrested
five times. The hitchhiker mugging
had resulted in a guilty plea to a
felony.
He still faced judgment day on the
cases involving the shakedown of the
undercover cop and the car theft ring.
And unknown to him, there was a
Nassau County judge who wanted
him imprisoned.
He needed legal magic, and found it
in a young lawyer named Richard
newsday.com
Mileo could not qualify for a job as an
unarmed security guard in Florida.
Meeting influential lawyer
NEWSDAY INVESTIGATION
managers were complicit, deals went
down under city bridges, and hot
machinery was stashed at a
Sheepshead Bay marina. Witnesses
testified of threats and visits from
O’Meara’s intimidators, her demands
for money she said was needed to pay
off a judge and an apparent attempt to
burn evidence as authorities closed
in.
Granted federal immunity for her
testimony, O’Meara used simple terms
to describe Melius’ role. “He is the
one who steals the Cadillacs,” she
testified in court.
With car theft rampant on Long
Island and often mob-controlled,
O’Meara and others described the
street outside Melius’ home as lined
with stolen, nearly new Cadillacs.
She recounted a negotiation at a
motel near LaGuardia Airport, where
a couple of out-of-state businessmen
attempted to pay for a Cadillac with a
cashier’s check. “Gary said they
wouldn’t take no check, that they
would only take cash,” O’Meara testified.
When the buyers returned with
proper payment, Melius and an associate identified only as Pauley led
them to his fleet, O’Meara testified.
“Gary gave me the keys to give them,”
O’Meara said. “They gave me the cash
in an envelope, and Gary counted it
out, and that was it.”
O’Meara served 3 years in prison.
Upon release she found a home in
Long Island politics.
She became an aide to then-state
Sen. Karen Burstein of Woodmere,
who said O’Meara caught her eye as a
leader in prison reform from the
inside. Burstein said that she believed
that O’Meara “might still be friendly
with some people,” but was through
with the rackets.
That may have been a miscalculation. In 1976, O’Meara was arrested
and charged with soliciting a cash
bribe in exchange for using her position to help secure parole for an
inmate, according to a news report.
The bribe allegedly was paid directly
to her bookie. O’Meara was found
guilty, but the conviction was overturned because of a wiretap the
courts ruled illegal.
Along the way, she found Judaism.
She died last year, said her rabbi,
Yitzchok Frankel.
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
NEWSDAY / STAN WOLFSON
Richard Hartman in 1976.
HOWARD SCHNAPP
Hartman.
Hartman was a well-connected,
self-destructive math genius who was
born a Brahmin in Long Island politics.
His father was William Hartman, a
one-time state senator, GOP committeeman and aide to Assembly Speaker
Joseph Carlino. Carlino was a seminal
leader of Nassau’s formidable party
organization, which at one point
caused Ronald Reagan to beam,
“When a Republican dies and goes to
heaven, it looks a lot like Nassau
County.”
Before his father pushed him into
law, Richard Hartman dreamed of
teaching mathematics, his sister Lynn
Alpert said.
He attended the Massachusetts
Institute of Technology but left before graduating and then earned a
degree at New York Law School. He
worked briefly as a Nassau prosecutor and a lawyer in traffic court,
where Melius met him.
Soon, though, he leapt into representing the police unions that cover
both Long Island county departments
and influence life — and taxes — here
to this day. He also represented
dozens of other unions, politicians
and mobsters.
Among the latter was an admitted
contract killer named John Alite, a
mob associate who became a witness
for federal prosecutors. In an interview with Newsday, Alite described
Hartman easily arranging a plea deal
that kept him out of jail for carrying a
handgun in an Island Park nightclub.
He said he still recalls how Hartman explained his success: “It’s who I
know, it’s not what I know.”
Hartman’s headquarters at 300 Old
Country Rd. in Mineola was a white
stucco building recalled as a dump by
nearly everybody who encountered it.
Melius’ contracting company eventually became a tenant.
Hartman’s unmarked domain, a
raucous all-hours hub of political
power, was on the second floor.
A secretary, Patricia Phillips Hartman, no relation to her boss, whom
she called “maniacal,” recalled: “He
would pound on the desk and yell for
a girl. ‘Girl! Girl!’ Everybody would
bump into each other trying to get
into that office quick enough.”
Former Suffolk Police Commissioner Gene Kelly, who worked
briefly for Hartman, said he “never
had a clock” and would call on work
matters at 3 a.m., something that
drove some to quit.
Hartman’s then-girlfriend, Patricia
Motamed, a secretary on the
overnight shift, recalled that as his
practice grew, Hartman hired so
many new attorneys that Melius was
enlisted to build each an office on the
roof.
“It really looked like a shack and a
dump,” Motamed said.
She also measured the fast-forming
friendship between the on-the-rise
police lawyer and his frequent client.
Alfonse D’Amato in 2014.
NEWSDAY / TOM MAGUIRE
NEWSDAY INVESTIGATION
B8
William J. Sullivan in 1963.
“You have two people who collided,
one who was brilliant, almost a savant,” said Motamed, “and one who
was a true, local thug.”
Change in fortune
The vagaries of record retention
and sealed files concerning decadesold cases make it impossible to ascertain Hartman’s full representation of
Melius.
What’s clear is that after meeting
Hartman, Melius was the beneficiary
of numerous fortuitous legal developments.
His 1964 felony plea in the hitchhiker case was a seemingly indelible
mark. But in September 1970, nearly
seven years later, it disappeared,
according to the Indian Gaming Commission memo. The outcome of the
case was erased and records of it
sealed.
Melius was the unusual beneficiary
of a statute that was touted as a
means of helping teenagers start fresh
after an early arrest. Melius was a
good deal older in 1970 — 26 — and
the statute makes no mention of a
retroactive youthful adjudication,
which the federal memo stated he
received.
And at the time, according to
O’Meara’s testimony, he was stealing
cars for her ring.
Under the statute, a candidate for
adjudication had to be recommended
by a district attorney, grand jury or
judge and investigated by a probation
agency.
Because the records are sealed, it’s
unknown who recommended the
treatment in Melius’ case, but the
circumstances were noted by Nassau
County Judge William J. Sullivan
when Melius appeared before him on
St. Patrick’s Day 1972.
He was awaiting sentencing in the
attempted shakedown of the undercover police officer, for which he had
been charged with grand larceny,
according to court documents.
Melius had agreed to a deal in
which he would plead guilty to a
misdemeanor. Melius’ lawyer,
Theodore Daniels, argued for probation.
But that day, Sullivan received a
probation report describing Melius as
unreformed. In scathing remarks
reflected in a court transcript, he told
Melius, “The probation report indicates you still keep undesirable company, that you are greedy for money,
and I am satisfied that you are the
one that got your co-defendant in
trouble.”
The judge called the erasure of
Melius’ felony in the hitchhiker’s
mugging a “break,” but, he told him,
“You didn’t learn anything from that.”
Despite the plea deal, Sullivan said,
“I think that the only way to
straighten you out and to get you
away from the associations that you
have been keeping, is to take you out
of circulation for a short while.”
Facing certain jail time, Melius
withdrew his guilty plea and turned
to a new lawyer, Hartman.
Sullivan was a rare Democrat
among Nassau judges. In Hartman,
Melius retained a lawyer with deep
GOP connections.
By the next court date a month
later, Sullivan had been replaced by a
new judge, Albert A. Oppido, a Republican. The change of judges is not
explained in surviving court records,
and both Sullivan and Oppido are
deceased.
A transcript shows Oppido taking a
stance diametrically opposed to Sullivan’s. The judge allowed Melius to
plead to misdemeanor attempted
grand larceny in the third degree,
according to court documents. He
sentenced Melius to 3 years’ probation and a $1,000 fine.
The National Indian Gaming Commission memo shows Melius again
the benefactor of lenient sentencing
in Queens, where he faced felony
charges including criminal possession
of stolen property for his role in
O’Meara’s ring. Melius pleaded guilty
to misdemeanor conspiracy and was
fined $500.
Citing FBI records, the memo
recorded one last arrest by Nassau
police in October 1971, that led to
grand larceny charges, which were
dismissed. The memo did not describe the activity that led to the
arrest or why the charges were dismissed.
By February 1974, Melius’ arrest
record had resulted in no known
prison time, with his single felony
conviction erased, according to the
federal gaming commission memo. It
totaled his fines at $1,500.
Melius bore one last legal burden:
more than a year still left on his probation resulting from his attemptedgrand-larceny plea in the shakedown
of the undercover cop.
This was more than an inconvenience. Probationers sometimes
receive surprise home visits from
probation officers and risk jail for any
B9
BY SANDRA PEDDIE
sandra.peddie@newsday.com
ALL ISLAND AERIAL / KEVIN P. COUGHLIN
of her old boyfriend. “That was all
Richard,” she said. “He fixed all
that.”
The probation department recommended Melius’ discharge and Oppido signed it. The once-accused
Cadillac thief and shakedown artist
left Nassau Supreme Court an unencumbered man.
Long Island power established
Three decades later, developer
Wilbur Breslin and his lawyer drove
to the same courthouse to do battle
with Melius, by then also a prominent developer.
In the parking lot, they noticed
Melius’ car in the chief judge’s spot.
“We’re dead,” Breslin recalled
saying. The sinking feeling intensified in Judge William LaMarca’s
courtroom, where Melius and his
lawyer were seated.
As Breslin remembers it, the courtroom door swung open and in came
a robed judge who greeted Melius
with an enthusiastic: “Hi, Gary!”
Then the door swung open again,
and another smiling face emerged —
that of Al D’Amato. He delivered
kisses to LaMarca, Melius and
Melius’ attorney, Marlene Budd,
Oheka Castle in November 2010.
according to an attorney who was
there.
Melius had sued Breslin, seeking
repayment of a loan and a broker’s
commission, on which Melius said
they had orally agreed.
As Breslin had gloomily forecast,
the case went south for him. In his
ruling in 2005, LaMarca said contradictory testimony by Breslin and
Melius left him having to weigh
whose was more believable. He said
he found Melius a “more credible
witness” based on other witnesses’
testimony.
Breslin appealed the award of the
loan, and a state appellate court in
Brooklyn overturned LaMarca’s
decision, finding that Melius’ argument hinged on a complicated “kickback scheme, which was illegal and
unenforceable.”
LaMarca’s decision on the loan,
they determined, was “contrary to
the weight of the credible evidence.”
It was a loss for Melius, but it
proved a contrary point: His influence on Long Island had grown far
more than could have been expected
once upon a time.
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
violation.
Escaping the obligation required a
recommendation from probation
officials who two years earlier had
found him unreformed, and then a
judge’s OK.
Hartman was familiar with the
heavily politicized department. His
sister was an officer there and he
would represent its union for years.
In February 1974, Melius was the
subject of a new probation department report that noted a remarkable
transformation. It concluded that he
had “demonstrated a complete
change of attitude and behavior,”
and had “concrete roots in the community and is seen as a responsible
father and citizen. He is conscientious and ambitious with his business.”
The author of the report was John
Siarkowski, a longtime probation
officer who has been active in the
Republican Party. He declined to
comment for this story. One of those
signing off on it was Daniel Ebbin,
the now-deceased longtime chairman of the probation officers’ union.
Perhaps there was truth to the
report, but when told of it, Motamed
said she recognized the handiwork
newsday.com
In the early 1970s, the Nassau
County Probation Department was
highly political, in part because there
was no Civil Service test for positions,
according to former employees. Anyone seeking a job in the department
needed a referral from Nassau Republican headquarters.
“It was strictly political,” said
Stephen Goldberg, who retired as
assistant director in 2015. Candidates
would be asked in job interviews, he
said, “Who’s your committeemen?
Who sent you?”
Michael Vicchiarelli, former president
of the probation officers association,
said, “If you wanted to be a probation
officer in Nassau County prior to the
creation of the unified court system,
you had to have a referral to Post
Avenue,” the location of Nassau Republican headquarters in Westbury. The
unified court system is the administrative arm of the courts.
Today, there are Civil Service rules
governing jobs in the department.
Louis Milone, who ran the department in the 1970s, was a Republican
executive leader for Rockville Centre
and the brother-in-law of Ralph Caso,
the Nassau County executive from
1970 to 1978. The current Nassau
Republican leader, Joseph Mondello,
began his career as a Nassau probation officer before he went to law
school.
Richard Hartman, a well-connected
attorney, was known for his ability to
obtain favorable terms for clients trying
to avoid jail time for criminal offenses,
according to several who worked with
him. Hartman, who represented scores
of law enforcement unions, later represented probation officers.
“If you wanted to get a good probation deal, you went to Richie,” said
Lewis Kasman, a former Hartman
intern and Caso aide.
One beneficiary of Hartman’s legal
finesse was Walter Cox, a Republican
committeeman who, while driving
drunk, crashed his car into a supermarket and stole $881. With Hartman
representing him, Cox avoided jail time
and even had his sentence — 5 years
of probation — reduced to 2. He later
became Hartman’s investigator on
police union cases in New York City,
until he was imprisoned after being
convicted of impersonating a federal
lawman in an effort to derail an extortion case against a congressman and
four Oyster Bay officials.
NEWSDAY INVESTIGATION
Therolethat
politicsplayed
inNassau
probationin’70s
B10
CHAPTER 2
NEWSDAY INVESTIGATION
DEALS, COP
CONTRACTS:
LEARNING
FROM THE
MASTERS
BY SANDRA PEDDIE
AND MAURA MCDERMOTT
sandra.peddie@newsday.com
maura.mcdermott@newsday.com
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
I
n the years after 1974, when he put
his last criminal conviction behind
him, Gary Melius launched a
career that saw him buy, sell, renovate, build and manage more than a
million square feet of property. At
critical moments, he received public
help worth millions of dollars from
officials to whom he gave campaign
contributions and favors.
During the same period, Melius’
first great mentor, the late lawyer
Richard Hartman, negotiated a series
of police contracts unprecedented in
their generosity that to this day inflate Long Island’s outsized taxes.
Last year, 1 in 4 officers in the two
county departments, or more than
1,300, earned over $200,000. In New
York City’s department, which is 10
times larger, the comparable figure
was 48, or 1 in 1,000.
And another major Melius ally,
Alfonse D’Amato, after a controversial
tenure as Hempstead’s presiding
supervisor, won election to the U.S.
Senate in a giant upset.
D’Amato toughed out an investigation into kickbacks by town employees to the Republican Party; allegations of favoritism in placements into
subsidized housing in his hometown,
Island Park; and a district attorney’s
report that concluded politically
connected developers had received
below-market leases on valuable
properties in Mitchel Field. In 2003,
the U.S. courthouse in Central Islip
was dedicated in his name.
In the go-go period between the
mid-’70s and mid- to late ’80s, each of
these men struck out audaciously,
catapulting themselves beyond all
expectations.
The deals and practices of the time
illuminate how the burgeoning suburban landscape of Long Island became
home to a brand of politics usually
identified with big-city machines. It
featured a kickback regime in which
government workers in Nassau paid
the Republican organization 1 percent
of their salaries in exchange for raises
or promotions; the rewarding of
political contributors, connected
lawyers and favored contractors with
government largesse worth millions;
and the power of emerging public
unions over political careers at contract time.
For Hartman and D’Amato, the
decade marked a coming of age.
For Melius, the decade held a neophyte’s education in a system he fit
into well, in no small part because he
made his connections to Hartman
and D’Amato just as they were leaving
indelible marks on Long Island.
Desmond Ryan, the now-retired
executive director of the Association
for a Better Long Island, the real
estate industry trade association,
found that despite experiencing
Melius’ wrath at times, he had to give
him his due. What he recognized, in a
way, was something akin to Hartman’s
brainpower and D’Amato’s guile.
“He methodically reinvented himself,” Ryan said. And that, he concluded, “in itself is an act of genius.”
Melius and his mentor
Melius moved his construction
business to the ramshackle two-story
stucco building at 300 Old Country
Rd. in Mineola where Hartman, the
insomniac lawyer who represented
him, ran his law office 24 hours a day
in a near-crazed manner.
The office was a beehive. There
were up-and-coming attorneys, like
Anthony Capetola and Michael Axelrod, who eventually became political
players. And there was a rolling cast
of characters, including a Republican
committeeman who eluded jail, with
Hartman’s help, after he drunkenly
crashed his car into a supermarket
and stole $881.
Melius hung out at Hartman’s law
office, too, and met his future wife,
Pamela Robb, an office secretary and
an NYPD sergeant’s daughter.
Hartman and Melius — both gamblers — became confidants.
Patricia Motamed, Hartman’s for-
mer girlfriend and secretary, said she
remembers Melius answering Hartman’s calls from Atlantic City asking
for cash when he was on gambling
benders. “Sometimes, when the losses
got so great, he would call up Gary,
and Gary would fly down with a
satchel of $250,000,” she said.
James Mileo, a Nassau cop who was
arrested with Melius in 1971 in an
extortion case, said he once witnessed Melius, at Hartman’s request,
retrieving $500,000 from Hartman’s
home to take to him when he was
hospitalized.
But when dealing with politics and
his union clients, Hartman’s political
acuity and canny negotiating skills
were unrivaled, and Melius was there
to take it all in.
B11
NEWSDAY INVESTIGATION
NEWSDAY / STAN WOLFSON
Deals,copcontracts:Learningfromthemasters
sors wrested contract negotiations
from him, and the police unions
staged sickouts and packed board
meetings. Francis Purcell beat Caso in
the next Republican primary.
Hartman, D’Amato and the GOP
flourished, with the police unions
standing by them. The Suffolk PBA
followed suit, hiring Hartman and
winning comparable pay and benefits.
Soon the New York City PBA was
knocking on Hartman’s door with a
$750,000 retainer.
“That changed everything,” Motamed said. “The money just started
rolling in.”
For Long Island taxpayers, it
started rolling out, with police negotiations often setting the pattern for
talks with other government unions.
Lawyer Richard Hartman in 1976.
In more recent times, both the
Nassau and Suffolk police unions
have made modest concessions, such
as in scheduling. In 2012, the Suffolk
union agreed to a two-tiered pay
scale, with new officers earning less.
Still, such concessions have not had a
major impact on the overall cost of
policing on Long Island.
Even with some trims in union
contracts, Suffolk faces a budget gap
of about $150 million. Since 2012, it
has eliminated 1,000 full-time government positions, as well as health
centers and the county nursing home.
Since 2000, Nassau has suffered the
CONTINUES on B12
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●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
more overtime opportunities and
unused time added to pension calculations.
By 1975, police costs had increased
by 250 percent in only five years,
forcing a near-record property tax
hike. A Newsday analysis found that
the Nassau police ranked lowest in
days worked and highest in pay
among the country’s 24 largest departments. The combination of a 59 percent pay increase over the previous
five years and a reduction of 29 workdays fueled the skyrocketing costs
even as crime rates were dropping. It
got to be too much for Ralph Caso,
the Republican county executive. But,
with powerful support from D’Amato,
then the Hempstead Town supervisor,
the GOP-controlled board of supervi-
newsday.com
Public employee unions were new
to Long Island in the late ’60s. Few
people had experience negotiating
union contracts. Hartman, though,
learned fast and won a succession of
benefits from willing politicians who
understood the unions’ growing
political power.
In 1969, Hartman landed the Nassau
PBA as a client through his father, a
well-connected Republican politician,
according to longtime labor lawyer
Thomas Lamberti. He soon proposed
not just pay increases, but also costly
benefits buried in the fine print, like a
reduced workweek — a critical detail
not made public until after it had
been approved.
Over the years, the print only got
finer — additional night differential,
NEWSDAY INVESTIGATION
B12
ignominy of having to have its budget
overseen by a state financial control
board, a measure usually reserved for
the state’s poorest and most troubled
cities and counties.
In December, the control board
took the drastic step of ordering the
county to make $18 million in spending cuts.
Last year, the county couldn’t provide the control board with definitive
copies of its police and other union
contracts. The county explained that
the provisions, first engineered by
Hartman in a maze of deals, were
spread among too many contracts,
codicils, side agreements and addenda.
Perhaps incongruously, it was
Melius, in an interview with Newsday
four years ago, who addressed the
effect of the police contracts. “They
shouldn’t be getting what they’re
getting,” he said. “They’re robbing the
public.”
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
Real estate portfolio
Melius said he became part of
Hartman’s entourage in New York
City, telling a Newsday reporter in
2014 that he was so vital to PBA representation that he had a parking spot
at City Hall.
He became more entwined with
Hartman in other ways. In 1975, Melius
bought his building at 300 Old Country
Rd., which was a prime location, for
$332,000, sweetened by a $325,000 loan
from Hartman, records show.
His real estate career began to take
shape.
As was the case with other subsequent deals by Melius, 300 Old Country Rd. was the subject of transactions that on their face were hard to
understand. In 1979, Melius sold the
property for $69,000 to Capetola,
Hartman’s partner and Melius’ lawyer
or partner on other transactions.
A year later, Capetola sold it back
to him for even less money —
$54,000.
Real estate professionals say that
sale prices on commercial properties
sometimes depend not only on market value, but on occasion also can
reflect strategies to minimize tax
liabilities.
Melius demolished the building
and erected a 76,000-square-foot
office condominium complex. He
would later offer the condos for $235
a square foot, which, if he was successful, would have brought in about
$17 million. Records do not indicate
how much he made.
Melius was on his way as a developer. He built a portfolio characterized by the sort of blandness that
wouldn’t win architecture awards but
was profitable in Long Island’s booming early ’80s market.
“It was timing and luck,” Melius
told a Newsday reporter. “You bought
something — the next day you sold it,
and you made a million dollars.”
In Great Neck, he built six lowslung brown office buildings that he
later described as “six of the ugliest
buildings designed by man.” The law
firm representing him on the development included Capetola; D’Amato’s
brother Armand; Jack Libert, who was
then also counsel to the Nassau Board
of Supervisors; and Joseph
Famighetti, a former member of the
now-defunct Long Island State Parkway Police who over the years represented the Suffolk PBA, politicians
and their family members.
Melius paid under $600,000 in 1984
for a property in Mineola where he
built 44 condos, records show. He
sold one unit to Famighetti for
$130,000. If the others on average
went for a similar price, the sales
would have netted him $6 million.
In 1985, Melius paid $1.7 million for a
site on Merrick Avenue in Westbury,
constructed a squat office building and
sold it in 1988 to his friend John Nasseff’s West Publishing company for
nearly $12.8 million, according to property records. Famighetti, Melius’ longtime friend and sometime lawyer,
served as West’s attorney.
Though Melius played down his
acumen — he once stated in a sworn
deposition, “I’m not too bright” —
others noticed the opposite.
“He’s the smartest person in the
room,” real estate broker Stephen
Caronia said in an interview. “He understands people. He understands how
they think. He understands their motives, and he’s got an innate, unteachable sense of how to get things done.”
Over the years, Melius built a web
of more than 100 corporate entities, a
typical tactic of smart real estate
players that serves to contain the debt
to individual properties. Sometimes,
he changed ownership on paper, by
transferring a property between two
of his companies. Tax returns he
submitted to the court when he sued
his former accountant show large
sums of money flowing into his companies and being quickly redistributed to affiliated companies.
Turning to various lenders
For financing, he established a
collection of sources, from major
banks to less conventional lenders.
Some were prominent banks, like
the Bank of New York. Another
lender was Ivan Kaufman, now chief
Alfonse D’Amato, then a U.S. senator,
with President Ronald Reagan at a
fundraiser in March 1984 at the
Waldorf Astoria hotel in Manhattan.
NEWSDAY / ALAN RAIA
Nassau County GOP leader
Joseph Margiotta in January 1982.
held a weighted vote based on his
town’s population, and Hempstead
was far and away the biggest town.
By 1977, D’Amato became presiding
supervisor of Hempstead, which gave
him the highest number of weighted
votes on the county board.
From his hometown of Island Park
to the deep corners of county government, sweetheart deals abounded
during D’Amato’s tenure.
In Island Park, where he still held
great sway, 21 poor black families
were evicted from a building in 1975
after the village refused to issue permits for the landlord to rehabilitate it.
The village replaced it with subsidized housing that was filled with
politically connected residents, including the in-laws of D’Amato’s cousin,
according to an audit by the U.S.
Department of Housing and Urban
Development.
Years later, in a civil lawsuit filed
by the U.S. Justice Department, former Village Clerk Harold Scully said
in a deposition that D’Amato was the
behind-the-scenes mastermind in the
episode, according to news reports of
the time.
D’Amato frequently called with
instructions, occasionally identifying
himself only as “God,” according to
the news reports.
At a news conference he gave as a
U.S. senator, D’Amato said he had no
role in any favoritism and praised the
village. “It was a great effort on their
part and a wonderful program for
those families,” he said.
In a statement issued in 1990 by his
press secretary, Zenia Mucha,
D’Amato said, “Dredging up allegations that in fact are untrue and go
back as far as 25 years is totally outrageous and doesn’t deserve a response.”
While supervisor, D’Amato placed
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
As Melius made his way, so did
Alfonse D’Amato. He began his career
in Hempstead Town, the heart of
Nassau’s Republican machine, running political campaigns and catching
the eye of the county Republican
leader Joseph Margiotta.
Margiotta invited newcomers from
the city to join Republican clubs,
attend barbecues and lick envelopes;
and he rewarded them with jobs,
which he, rather than the county
executive, controlled. In return, he
expected loyalty. The party demanded kickbacks through a regimented system in which workers
seeking promotions and raises paid
the party 1 percent of their salaries.
The kickbacks were challenged in
two court actions. In one, Nassau and
Hempstead Town workers filed a
class-action lawsuit demanding the
return of money they had paid to
secure jobs and promotions. In the
other, federal prosecutors pursued a
criminal case that resulted in the
indictment of seven former or current
Hempstead Town Republican officeholders.
In 1975, D’Amato was subpoenaed
by a federal grand jury probing the 1
percent kickbacks. He testified that
he couldn’t recall collecting such
payments, and he was not among
those indicted.
Years later, a note D’Amato had
written surfaced. In it, he wrote that a
sanitation worker’s raise would be
approved “if he took care of the 1%.”
In a 1980 interview, D’Amato defended the note, saying he was merely
trying to help the worker. Of the 1
percent payments, he said, “It was a
very common practice at the time.”
More than 1,000 Nassau and Hempstead Town workers seeking refunds
came forward to say they had paid
the kickback.
The Republican Party agreed to
settle the class-action suit, returning
money that the workers had paid in
return for jobs and promotions. In the
criminal case, three Hempstead Town
officeholders were convicted of illegally soliciting political contributions
from town employees.
D’Amato became supervisor when
the Republicans used the tried-andtrue political tactic of appointing
loyalists to open elected offices so
they could then run as incumbents.
Margiotta tapped D’Amato in 1969
to run for receiver of taxes. As described by D’Amato in his memoir,
Margiotta named him to the powerful
post of Hempstead Town supervisor
23 seconds after he was elected.
The position had become open
when the incumbent, Purcell, had
been elected presiding supervisor on
the same ballot.
In those days, Nassau was run by a
board of town supervisors rather than
a county legislature. Each supervisor
newsday.com
executive of Arbor Realty Trust of
Uniondale.
Melius has said he met the mortgage executive more than 25 years
ago when Kaufman found space in
the Westbury office building Melius
had built.
Records show that Kaufman, who
declined to comment for this story,
has lent Melius more than $50 million
through private companies he controls, even when Melius was going
through tumultuous business times.
“When I first met Ivan, probably
know him a year, he lent me $9 mil-
From supervisor to senator
NEWSDAY INVESTIGATION
AP / BARRY THUMMA
B13
lion without a document,” Melius said
in a Newsday interview several years
ago. “OK, two weeks later, he made
the document.”
The loans involved Oheka Castle,
which Melius bought in 1984, and
other important properties.
Among Melius’ less conventional
real estate partners was someone who
ran a Long Island office of a brokerage that the Securities and Exchange
Commission accused of running a
phony “boiler room” stock operation,
and who was later barred from any
supervisory or ownership role in the
securities industry.
Another partner was a key witness in
an epic mob trial, later convicted of
loan-sharking. Teddy Moss was Melius’
partner on a three-story walk-up at 157
E. 55th St. in Manhattan. Moss provided
critical testimony in the ’60s trial in
which Mafioso “Crazy Joe” Gallo, a
tabloid staple, was convicted of attempted extortion and served 9 years
before being gunned down in a brazen
Little Italy rubout.
In an interview, Moss’ widow, Goldie,
recalled family trips to Oheka and said
that Melius settled accounts fairly with
her after her husband’s death.
Among other lenders were Melvin
Ditkowich and Vytautus Vebeliunas.
Ditkowich figured prominently in an
investigation of a New York City
judge who was removed from the
bench after arranging high-interest
loans from Ditkowich to private
clients in his chambers and not reporting his commissions to the IRS.
Vebeliunas, prominent in the
Lithuanian-American community,
beat a mortgage fraud charge in 1987
but was convicted in 1992 of stealing
$8 million from the Lithuanian credit
union he controlled, according to
court records.
Melius’ holdings stretched at their
most expansive from suburban
Chicago, where he planned a
1,000-unit residential development, to
Maryland, where he purchased an
800-unit apartment complex.
On Long Island, Melius bought and
sold at least 13 properties.
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
NEWSDAY INVESTIGATION
B14
Hempstead tax revenues in non-interest-bearing accounts at the Bank of
New York when banks were paying 10
percent interest on deposits. A state
grand jury, while handing up no indictments, issued a report in 1979 that
found such deposits by tax receivers
in Nassau’s town and city governments had cost taxpayers $6 million.
That figure was peanuts compared
with the bargains given to the politically wired at Mitchel Field, a decommissioned air base owned by the
county. In the late 1970s, Nassau
officials started granting 99-year
leases there.
An investigation by District Attorney Denis Dillon identified the leases
as the biggest giveaway in Nassau
County history, costing taxpayers an
estimated $2.7 billion over the span of
99-year lease terms. D’Amato declined to be interviewed on this and
other matters for this story.
Dillon’s report said D’Amato took
charge by negotiating the first lease,
with United Parcel Service, which set
the standard for two dozen more,
almost all arranged through politically connected lawyers, with belowmarket rents and highly favorable
terms to the companies.
In the late ’70s and early ’80s, a
market-rate rent on such a deal was
$20,000 an acre, former Nassau
Deputy County Executive James
Nagourney said in an interview. UPS
leased the property for about $9,500
an acre, with annual rent escalators of
5 percent, rather than the standard 10
percent.
The Nassau Board of Supervisors
approved the lease. As presiding
supervisor of the largest town,
D’Amato had the most votes on the
board under the weighted system,
and no lease could be approved without him.
D’Amato said his office had “absolutely nothing to do with the leases”
and described Dillon’s report as “totally inaccurate.”
But in a recent interview, Nagourney, who was deeply involved in the
Mitchel Field project, said he was still
troubled by the lease, which he described as a “giveaway.”
“The whole pattern for Mitchel
Field was set by D’Amato,” he said.
None of this stood in D’Amato’s
way as he launched his remarkable
challenge in 1980 to Sen. Jacob Javits,
a liberal Republican icon. Some of it
even helped.
Lawyers and developers involved
with the Mitchel Field leases ponied up
with contributions. Among them were
William Cohn, Armand D’Amato’s
partner; Margiotta; and Libert, who was
then counsel to the board of supervisors. Among the developers were
Wilbur Breslin, Alvin Benjamin and
Nathan Serota. In that first campaign,
they gave Alfonse D’Amato at least
$16,500, or $47,000 in today’s dollars. By
1986, they had given him a total of at
least $47,775, which would be worth
$106,000 today.
The Bank of New York, where
D’Amato had deposited millions in
Hempstead Town funds in no-interest
accounts, gave his campaign $130,000
in four no-collateral loans at 10.5
percent interest. The prime lending
rate in 1980 ranged from 11.5 percent
to 20 percent.
After federal authorities opened an
investigation, D’Amato said he probably should not have sought the loans.
No charges were brought.
Money mattered, but so did human
capital. According to Republicans
from the time, the police unions,
mobilized by Hartman, turned out
volunteers for phone banks and held
rallies — a huge boost for a candidate
running against the state party establishment. “Everybody was working,”
said Lewis Kasman, who worked for
Armand D’Amato and Hartman at
various times.
Records from Alfonse D’Amato’s
earliest Senate fundraiser show that
nearly half the donors had ties to
Hartman, including his brother-inlaw, Bruce Alpert, who served as the
campaign’s counsel.
In an interview, Kasman, who later
turned federal informant after running mob-connected nightclubs,
remembered breaking down donations into smaller amounts to evade
federal limits. As for Melius, he “was
always good for cash,” he said.
D’Amato needed “walking-around
money,” and Melius would provide it,
he said.
Melius’ earliest contribution to
D’Amato listed in available files
shows him giving $1,000 in January
1980. From there, political donations
became a way of life for Melius.
Melius also rented office space to
D’Amato’s campaign at 300 Old Country Rd. in 1983, according to campaign
records.
By D’Amato’s last campaign in 1998,
filings show Melius and his family
had cumulatively contributed a total
of $17,000 to the senator, among the
largest amounts tied to any individual
donor.
That was a small part of at least
$1.3 million in contributions made by
Melius, his family, his businesses and
employees to dozens of politicians
over the decades. They would include
at least $61,300 to then-Suffolk
County Executive Steve Levy, $33,200
to then-Rep. Steve Israel, and $21,400
to then-Nassau County Executive
Edward Mangano, among others.
Melius has given to Democrats,
including Gov. Andrew M. Cuomo
and Rep. Kathleen Rice; Republicans,
like Rep. Peter King and then-President George W. Bush; Conservatives,
among them then-Suffolk Sheriff
Vincent DeMarco and then-Judge
Ettore Simeone; and Independence
Party members, like Brookhaven
Town Clerk Donna Lent and Hunting-
ton Councilman Eugene Cook.
The number of beneficiaries and
dollar totals are likely far higher
because records for local campaigns
are available only as far back as 2006
and state and federal records go back
only to the late 1980s, leaving much of
his record inaccessible.
D’Amato achieved his surprise
primary win in 1980 after mocking
Javits’ age and health, and he triumphed in the general election when
the liberal vote split between Javits,
then 77, who stayed in the race on the
now-defunct Liberal line, and Rep.
Elizabeth Holtzman (D-Brooklyn).
He held his celebration in Island
Park, at Channel 80, a nightclub managed by Kasman and owned by Phil
Basile, Kasman said. Basile was later
convicted of conspiring with organized crime figures. His wife, Angela,
contributed $2,000 and volunteered
on the campaign, campaign records
show.
Four years later, D’Amato was the
sole character witness for Basile at
his trial, where he was accused of
conspiring with Lucchese capo Paul
Vario to help secure parole for the
mobster Henry Hill by setting up a
no-show job. Hill’s life was portrayed
in the movie “Goodfellas.”
After D’Amato left the stand, he
embraced and kissed Basile. Basile
was convicted and sentenced to 5
years’ probation, plus a $250,000 fine.
B15
Long-lasting cost of police contracts
NEWSDAY INVESTIGATION
BY SANDRA PEDDIE
NEWSDAY / ALAN RAIA
Mitchel Field, once an air base, in 1981.
In a campaign debate in 1980,
D’Amato was asked about Basile. He
said Basile was someone “I had
known as a hardworking family
man.”
Cultivating connections
Richard Hartman with PBA leaders
in Mineola in August 1976.
“When he was on top of the hill, he
was the most powerful lawyer in the
state of New York.”
Over time, Melius began to distance
himself from his longtime mentor. The
ill will between them grew, and Hartman maneuvered to push Melius away
from the city PBA, flagging his criminal
past to union leadership. Melius felt
betrayed. “I was trying to hang out
with what I thought were good guys,
lawyers, law enforcement,” he told the
Village Voice. “I would have done better
with the bad guys.”
Hartman’s gambling addiction
eventually overtook him. He was forced
to surrender his law license after being
charged with misappropriating union
money. Then, federal prosecutors
indicted Hartman for racketeering, tax
evasion, fraud and other charges.
He was convicted in 1998 of being
part of an elaborate kickback scheme
in which he and his associates received
lucrative professional contracts in
return for payoffs to leaders of the
city’s Transit Authority PBA.
Hartman spent nearly 5 years at a
low-security federal prison in Pennsylvania. After his release, he taught math
at Christ the King High School in
Queens.
Melius, in an interview with Newsday
reporters in 2014, said he hadn’t spoken to Hartman for “20-something
years” but had eventually reconciled
with him. He described the man who
had helped resolve his early criminal
cases as “a broken-down suitcase.”
Hartman died of lymphoma in 2015.
NEWSDAY COM/PATHWAYTOPOWER
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CONTINUES on B16
increase in pay and benefits in 1975,
making Nassau police the highestpaid in the country.
Caso began a two-year court
battle but was outmatched. Hartman
held police rallies, while D’Amato led
a palace revolt. In September 1976,
the board of supervisors took control
of the negotiations away from Caso
and approved a 9.5 percent retroactive raise.
In 1978, Hartman won yet another
pay increase — 24.5 percent over three
years — from an arbitration panel. The
size and circumstances of the raise
prompted Gov. Hugh Carey to call for
an investigation.
Joseph French, who cast the swing
vote on the arbitration panel, was
Hartman’s longtime friend and client.
During the contract arbitration, French
and Hartman had discussed a real
estate dispute French was involved in.
Despite their close relationship,
then-Nassau County Attorney Edward
McCabe, backed by D’Amato, concluded the county should not challenge the contract awarded by the
arbitration panel.
That paved the way for later police
contracts, which today contain six-figure salaries and generous benefits.
Lamberti estimates that it costs about
$300,000 a year to put a police officer
in a car.
Before long, Hartman represented
nearly 100 law enforcement unions,
including the biggest of them all, the
New York City PBA, where he brought
Gary Melius along as an aide.
“Richard was somebody everybody
idolized,” Richard Lerner, Hartman’s
former partner, said in an interview.
newsday.com
As D’Amato and Hartman surged,
so did Melius. By 1983, he no longer
listed himself as “contractor” on
campaign contribution filings. Instead, he was the senator’s “Liaison
for Police and Fire.” He boasted to
Newsday that he negotiated the New
York City PBA, fire and correction
officers contracts, though the late
James Hanley, who oversaw New
York City’s labor negotiations at the
time, said Hartman handled the talks
himself. “Richie was a one-man band
for negotiating contracts,” he said.
Melius worked hard to burnish his
image and cultivate connections to
Long Island’s elite. He joined the
Better Business Bureau and supported charities, such as the Nassau
Children’s House, winning a “Friend
of the Youth” award. He listened in
his car to tapes of the Rolling Stones
and the “The Bodyguard” soundtrack, according to court records. But
he found his way to the board of the
Long Island Philharmonic, joining
On its face, nothing seems drier
than the minutiae of a labor contract,
particularly one involving police work.
Yet it was over obscure issues like
accrued time off, night differential and
shift rotation that epic confrontations
took place years ago, leading to staggering boosts in police pay and benefits that saddle Long Island taxpayers
to this day.
The changes were largely the work
of a math genius with an unquenchable gambling obsession, the lawyer
Richard Hartman, who was aided by a
canny and ambitious town supervisor
named Alfonse D’Amato.
In 1969, Hartman landed the Nassau
Police Benevolent Association as a
client and threw himself into contract
negotiations, according to the labor
lawyer Thomas Lamberti. Hartman
proposed not just pay increases, but
also significant cuts in the length of the
workweek.
Then-Nassau County Executive
Ralph Caso, a Republican, went along
when times were flush. Hartman gave
Caso a lot to go along with, like an
additional night differential for the
3,500-member force, more overtime
and the right to add unused time to
pension calculations.
As pay and benefits piled up for the
county police force, officials of Nassau
villages with their own police departments worried — correctly — that their
officers would demand parity. Lamberti, who represented those Nassau
villages, challenged the county police
contract in 1973 in a way that turned it
into a national issue.
He filed a complaint with the federal
Cost of Living Council, an agency
created by President Richard Nixon in
1971 to slow inflation. Lamberti argued
that when the cost of benefits was
added to the 7.5 percent wage hikes
agreed to by Nassau, the contract
really amounted to a 15 percent raise.
The council agreed, ordering the
county in January 1974 to cut the raise
to 5.5 percent. The following spring,
Hartman asked the U.S. Supreme
Court to stay the order, but it refused.
The two sides settled. Nassau
agreed to pay a $220,000 fine for
violating wage controls, and the federal
government agreed to the 7.5 percent
pay raise, Lamberti said.
The following year, the battle lines
shifted. The county was in a deep
recession. Police costs had increased
250 percent since 1970, forcing a
near-record property tax hike. Caso
broke with the PBA.
Negotiations broke down after
hundreds of cops called in sick with
“blue flu.” An arbitration panel
awarded the union a 12.3 percent
NEWSDAY / STAN WOLFSON
sandra.peddie@newsday.com
such members as Louis Fortunoff,
then executive vice president of the
Fortunoff jewelry and home goods
chain; Raymond Jansen, then the
publisher and CEO of Newsday; and
Steven Sabbeth, then the Nassau
Democratic leader and a close friend.
Sabbeth later was sentenced to 8
years in federal prison for bankruptcy
fraud.
Melius became an ample contributor to charity through the foundation
he named for his mother, Elena, often
avoiding public credit, because, he
told Newsday, “then you’re doing it
for a different reason.”
The “Oheka Cares” website says
the Elena Melius Foundation has
given away more than $2.8 million to
nearly 500 recipients.
In one year alone, 2014, the foundation reported raising about $293,000
and giving it all away in grants. The
beneficiaries included the Fire Marshal Benevolent Association of Nassau County, which received $1,000;
the FBI Agents Association, which
received $5,000; and the Pat Cairo
Family Foundation, which received
$1,000. The Cairo foundation was set
up by Joseph Cairo, who is second-incommand in the Nassau Republican
Party.
As an example of his low-key approach to giving, he recalled that
when someone suggested inviting
news coverage, he threatened to
cancel a reception at Oheka he hosted
for the divers who looked for bodies
after the Flight 800 crash that killed
230 people off East Moriches in 1996.
“I said, ‘No, then you’re not coming. I
don’t want any publicity for it.’ ”
Richard Amper, executive director
of the Long Island Pine Barrens Society, said Melius has given $72,500
since 2007, either by direct donations
or reducing the rate for the group’s
annual fundraiser at Oheka.
“I would say that he makes distinctions between people who can afford
an expensive wedding and people
trying to do the public good,” Amper
said.
His good works also spread his
name and helped him develop relationships.
“He enjoyed putting people together,” Nassau Democratic leader Jay
Jacobs observed. “To him early on, I
believe it was about wanting to be
connected.”
Ryan, of the Association for a Better Long Island, saw much the same
thing: “He has this affinity to latch
onto people who have access to
power.”
A life-altering purchase
Nothing loomed larger in these
efforts than Oheka Castle, where he
made his life-changing acquisition,
buying the derelict estate in 1984.
Helping him was a vibrant woman
named Allegra Capra. She was the
former longtime girlfriend of
Carmine “The Snake” Persico, boss of
the Colombo crime family after its
war with “Crazy Joe” Gallo and his
brothers.
Capra ran North Site Realty of
Syosset, which was financed by her
later companion, Sam Scibelli, a Westbury auto shop owner. Scibelli, asked
if he himself had organized crime ties,
said, “There was no gangsters involved.”
According to Scibelli and Capra’s
HOWARD SCHNAPP
NEWSDAY INVESTIGATION
B16
State Supreme Court Justice
Jack Libert in January 2016.
niece, Denise Rosner, Capra acted as
the broker when Melius bought
Oheka for about $1.5 million, with a
$2 million mortgage from Ditkowich.
Local newspapers reported the
purchase with photos showing Melius
beaming with pride. A notation on
the Oheka deed directs that it be sent
to “Gary Melius, Esq.,” even though
Melius’ formal education ended in the
eighth grade.
Otto Hermann Kahn, a Germanborn financial adviser to the Rockefellers, constructed Oheka, an acronym of his name, in Huntington as an
opulent getaway that surpassed all
Gold Coast mansions. The estate
included reflecting pools, stables, an
18-hole golf course and an airstrip,
and for decades it was the secondlargest private residence in America,
appearing as Xanadu in Orson Welles’
film “Citizen Kane.”
After Kahn’s death, his widow,
Addie, sold the castle and it fell into a
disrepair that culminated when the
Eastern Military Academy, which had
Three decades of Melius Foundation philanthropy
BY KEITH HERBERT
AND WILL VAN SANT
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
keith.herbert@newsday.com
will.vansant@newsday.com
The Elena Melius Foundation has
donated more than $2.8 million to
nearly 500 charities or individuals over
the last three decades, according to the
Oheka Castle website and filings with
state regulators.
Recipients have included well-known
health care organizations like the
Alzheimer’s Association; Catholic Charities, the American Jewish Committee
and other religiously affiliated groups;
and law enforcement organizations like
the National Law Enforcement Officers
Memorial Fund.
“I never promote what I give away,”
Gary Melius said in a conversation with
Newsday editors last April.
A section of the Oheka website
called “Oheka Cares” lists more than
480 recipients of donations since
1986. The donations were made
through the foundation, named after
Melius’ late mother and headquartered at Oheka. On average, the foundation donated $153,000 annually
between 2006 and 2015, or more
than $1.5 million altogether, according
to state records.
Melius said recent financial difficulties had not stopped him from giving
his money away. “I am broke now,”
Melius said in the Newsday interview.
“I still borrow money to give to charity.”
While many of the recipients of
Melius’ generosity are Long Island
charities, organizations in New York
State and beyond are also recipients of
money from the Melius Foundation,
state records show.
In 2014, for example, the foundation’s
grants and contributions included
$15,500 to the Memorial Sloan Kettering Cancer Center in New York City;
$15,000 to the Mayo Clinic in Minnesota; $10,000 to the Family & Children’s
Association of Mineola; $6,000 to Cold
Spring Harbor Laboratory in Cold
Spring Harbor; and $6,000 to St.
Christopher’s Inn, a shelter and treatment center for homeless men in upstate Garrison.
Charitable groups created by politicians with whom Melius has been allied
have also received donations from his
foundation. Among these are the Pat
Cairo Family Foundation, created by
Joseph Cairo, a Republican Party leader
from North Valley Stream, in honor of
his wife, Pat, to support cancer patients;
and the Marie Cuthbertson Scholarship
Fund, named for the mother of Huntington Town Councilman Mark Cuthbertson.
The Family & Children’s Association,
based in Mineola, provides assistance
to Long Island’s most vulnerable
children, families and seniors. Patricia
Pryor-Bonica, a board member of the
association, said she believes that
Melius shares her concern that struggling families should be helped — and
that, like her, his willingness to help
was rooted in his own experiences in
tougher times.
“There was no help back in those
made the castle its home, went bankrupt in 1979. The property was abandoned, and vandals left it in ruins.
Melius’ decision to purchase and
renovate Oheka was a risk more
experienced developers bypassed.
“That’s the gambler,” his friend
John Nasseff said. “He takes chances.
Your average businessman, before
making a big purchase, consults with
a CPA and an attorney. Gary acts
right away.”
Melius continued buying properties. In 1986, he successfully bid $1.4
million for a shuttered pumping
station in Freeport called the Brooklyn Water Works. He had hoped to
convert the 19th-century Romanesque
Revival structure with castle-like
towers and arching windows into a
condominium development, although
years of trouble awaited.
Two years later, he entered the
fortunate club of developers who
secured bargain leases at Mitchel
Field.
Melius paid $7.6 million to take
over the lease at 107 Charles Lindbergh Blvd. from the warehouse of
Webcor, a troubled manufacturing
company, records show.
Under the leases, the county had
no authority to renegotiate terms
upon a sale. The omission of what is
called a non-assignability clause,
considered standard business practice, cost the county millions in lost
revenue. But it was a developer’s
windfall.
“I only paid those kind of dollars
because of the lease terms,” Melius
told Newsday at the time. “It’s a good
deal for the buyer.” His lawyers were
Libert, a member of Armand
days,” said Bonica, recalling her youth in
the 1940s and ’50s.
The Elena Melius Foundation has
experienced controversy at times. In
2002, it purchased a 98-acre parcel for
$50,000 on the Akwesasne Indian
reservation near the Canadian border,
where Melius had been involved in the
tumultuous construction of a tribal
casino. A year later, the foundation tried
to sell the land for $300,000, according
to court records.
Because the transactions involved
the foundation, the sale could not be
completed without the approval of the
state attorney general’s office, which
regulates charitable groups. The
attorney general objected, saying that
a $50,000 “finder’s fee” for Melius
that was part of the sale represented
“self-dealing” by Melius, a director of
the nonprofit.
Melius tried two more times to
obtain the state’s approval for the
sale, this time including a $25,000
fee to a Melius employee, Rich
Hamelin, according to court records.
The attorney general’s office continued to object, saying that the fee was
“an improvident use of charitable
B17
Gary Melius in the dining room of Oheka Castle in February 1989. He bought the derelict estate in 1984.
NEWSDAY COM/PATHWAYTOPOWER
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
NEWSDAY / DAVID L. POKRESS
newsday.com
assets.”
Finally, Melius went to court,
where State Supreme Court Justice
Geoffrey J. O’Connell approved the
sale and the fee in 2007. In his
ruling, O’Connell cited “the apparently undisputed large profit to the
foundation, which will assist it
greatly in carrying out its charitable
purposes.”
In another instance, Melius said last
year that the state attorney general’s
office had issued subpoenas to him
and his foundation, requesting documents. Newsday reported that the
subpoenas related to the foundation’s
acceptance of $250,000 from another foundation that one of his
friends, Steven Schlesinger, then
counsel to the Nassau Democratic
Party, had been appointed by the
courts to manage.
Melius’ statement came in an
application to Nassau County for a
sewer connection to Oheka Castle
that would handle wastewater from a
related proposal to build 191 condominium units.
Melius has strongly denied any
wrongdoing.
NEWSDAY INVESTIGATION
D’Amato’s law firm, and Joseph Carlino, the former Assembly speaker,
who was of counsel to the law firm.
The broker who worked with
Melius was Samuel A. Rozzi, the
nephew of then-Police Commissioner
Samuel Rozzi and Santa Rozzi, who
was chief of the county’s bureau of
real estate and insurance. The broker
did not respond to a request for comment.
Asked at the time about his use of
politically connected lawyers, Melius
was incredulous. “Who would you go
to — a nonpolitical lawyer?” he asked
rhetorically. “Let’s be realistic.”
But it wasn’t long before Melius ran
into trouble. The economy, and the
real estate market along with it, was
soon in crisis and office vacancies on
Long Island topped 15 percent.
The building on Lindbergh Boulevard remained empty. But in a remarkable turn of fortune, the Internal
Revenue Service agreed in October
1989 to rent the building for a decade
for $1.7 million a year, according to
court records.
At the time, D’Amato was on the
Senate committee overseeing the IRS.
In contrast to his pragmatic comment about hiring politically connected lawyers like Libert, when the
deal was announced, Melius said his
connections had played “zero” role in
landing the deal.
But it opened a few eyes in Long
Island’s real estate community. Ryan,
the longtime director of the industry’s
trade association, recently observed,
“You do not get institutional tenants
like that without some kind of influence from somebody. That just
doesn’t happen.”
NEWSDAY INVESTIGATION
B18
CHAPTER 3
CASINO FLOP:
STRUGGLING
OUTSIDE
LI’S COZY
NETWORK
BY KEITH HERBERT
AND GUS GARCIA-ROBERTS
keith.herbert@newsday.com
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
G
ary Melius has been rooted in
Long Island in almost every
way.
He grew up in a modest tract house
in West Hempstead and lives in a castle
in Huntington. He was mixed up early
in criminal activity in Nassau County
but came to befriend police leaders in
both counties, as well as FBI agents and
cops from many local departments.
He became a multimillionaire here,
has easily given more than $4 million to
scores of local charities and politicians
himself and with his family members,
businesses, employees and foundation,
and became a friend of judges, mayors
and county executives.
Yet, in the mid-’90s, he could be
found scrambling on an often icedover Indian reservation a 400-mile
drive away, clinging to the dream of
Akwesasne
N.Y.
making millions through a tribal
casino as he faced challenges from
federal regulators, a canny gaming
mogul and Mohawks who felt deceived by him.
His quest was the culmination of a
decade of bankruptcy and a
panorama of business misfortunes.
Those ventures often occurred when
he was distanced from his Long Island political network.
When Melius operated on the
political playing fields of Long Island,
he most often thrived. Off them, he
usually fumbled, begging the question: What accounts for the difference?
For Melius, the decade included five
business-related bankruptcies; more
than $20 million in debt to creditors
who had to settle for as little as 5 cents
on the dollar; hundreds of thousands of
dollars in unpaid gambling bills, mostly
at Donald Trump’s casinos; an investigation by a federal commission that
The windswept Indian reservation called
Akwesasne is home to the St. Regis Mohawk
tribe. A 400-mile drive north of Long Island,
the reservation straddles the New YorkCanada border. The 28,000-acre reservation
encompasses parts of towns in both countries with a main blacktop road as a spine
that is dotted by discount smoke shops and
cheap gas stations.
forced him to sell his 50 percent share
in a company seeking to run a casino on
an upstate Indian reservation; and an
accusation by a major bank that he was
fronting for organized crime figures.
A string of bankruptcies
His real estate meltdowns stemmed
in good part from the 1986 tax reforms signed by President Ronald
Reagan. With the elimination of tax
shelters that propped up commercial
real estate, Long Island’s property
market skidded just as the stock
market experienced a historic crash.
At one point, Melius said in an
interview, he was “rolling quarters”
just to pay bills.
The bankruptcies enveloped many
of his greatest successes, starting
with his first at 300 Old Country Rd.
in Mineola, where he had run a small
contracting company in a run-down
building owned by his lawyer and
mentor, Richard Hartman.
Melius bought the place, replaced it
with a commercial condo complex,
and put units on the market at prices
that would have had the potential to
yield about $17 million.
Then, in 1990, he was seeking protection from a $7.1 million foreclosure
on the property.
The bankruptcies also covered
properties in Uniondale, Carle Place
and Lemont, Illinois, outside Chicago,
voluminous bankruptcy records show.
Among the casinos chasing Melius
for more than $250,000 were Atlantic
City’s Trump Plaza Hotel, Trump Taj
Mahal Casino, the Showboat Casino
and another in the Bahamas, according to an investigative memorandum
by the staff of the National Indian
Gaming Commission.
The Bank of New York, which was
trying to recoup money from Melius
on a troubled mortgage, said it had
looked into his assets and then accused him of being involved with
members of organized crime. Melius’
lawyer adamantly denied the allegation. Melius’ early criminal record
included a bust for stealing Cadillacs
for an organized crime ring, according to court testimony.
Assertions and, in some cases,
B19
NEWSDAY INVESTIGATION
NEWSDAY / JOHN PARASKEVAS
Casino flop: Struggling outside LI’s cozy network
The upstate Akwesasne Mohawk
Casino Resort in October 2016.
to Gabriela Cacuci, a lawyer representing the bank who is now a senior
New York City corporation counsel.
In his complaint filed in 1996, Melius’
lawyer, Richard Lane, wrote that
Cacuci met with him and said that the
bank had obtained information that
accused his client of “fronting for the
Gambino crime family.”
The court documents do not provide details of the allegation.
Lane’s complaint contends that
Cacuci said Melius was “allegedly
connected” with several unnamed
organized crime figures who were
still alive and two notorious mobsters
who were dead — Roy DeMeo and
Tommy Agro. The complaint did not
specify how.
Before being murdered in 1983,
DeMeo was widely regarded as a vicious killer, with a reputation for dismembering victims behind a Brooklyn
bar he owned called The Gemini. In his
definitive mob history “Five Families,”
the author Selwyn Raab described
DeMeo as the Gambino family’s “most
feared hitman,” according to federal
and city authorities. Agro was a bookmaker and violent Gambino soldier
who eventually pleaded guilty to extortion and loan sharking.
In a Newsday interview, Melius
was asked directly about the allegations in the lawsuit. Denying any mob
CONTINUES on B20
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
turned government witness, alleged
that Mafia figures “had contact” with
D’Amato, according to an internal
1992 FBI memo. The memo said
D’Arco named five individuals, including Phil Basile, who owned the Island
Park club where D’Amato celebrated
his 1980 Senate victory, but did not
specify how often the contacts purportedly took place or over what.
These assertions did not lead to any
charges against D’Amato, who over
the years has adamantly denied any
association with the mob.
Melius faced similar allegations.
They came to light through his own
doing, after he defaulted on a $1.8
million loan involving a building on
West 58th Street in Manhattan.
The job of recovering the loan fell
newsday.com
instances of mob involvement by
politicians and real estate operators
have laced a half-century of Long
Island history.
Among the controversies confronted by Melius’ great ally, Alfonse
D’Amato, were several involving
organized crime figures.
As a U.S. senator, he unsuccessfully
sought favorable treatment from
federal prosecutors for Paul Castellano, boss of the Gambino crime
family, and Mario Gigante, the
brother of the boss of the Genovese
crime family, Vincent “Chin” Gigante.
D’Amato insisted he was simply providing the same constituent service
he would for any New Yorker.
Alphonso D’Arco, former boss of
the Lucchese crime family who
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
involvement, he said, “I don’t know
where that comes from.” In court
papers, Lane called the assertions
“malicious” and “without merit.”
Melius said in his lawsuit that the
bank had threatened that if he did not
pay up, it would lay out the allegations during court proceedings, which
would have made them public.
At one point, Cacuci said in an
interview, she received a phone call at
her office from a man who identified
himself only as “Gary’s lieutenant.”
He warned her to leave Melius alone.
“The message was clear,” she said.
“Stop pushing. Stop looking for assets.”
A settlement with the bank required him to pay $510,000 to satisfy
the debt, and in return the bank
agreed to keep confidential its findings “regarding Melius’ assets,
sources of cash flow and business
dealings and associates,” according to
court documents.
That closed the chapter until the
lid of confidentiality was lifted by
Melius himself, when he filed a multimillion-dollar suit against the bank
after being annoyed by erroneous
past-due notices he received after the
settlement.
In delineating the hardship he said
he faced, Melius listed what he said
the bank had asserted about his relationship with the Gambinos. That put
it in the court record, unnoticed for
two decades until discovered by
Newsday.
Melius said in an interview that he
did not remember anything about his
dispute with the bank. But he explained why he would retaliate
against the bank, even if it meant
outing allegations against him.
“If you mess with me, I will sue
you,” Melius said.
The case ended by mutual agreement in 1997, soon after a judge dismissed all but one of Melius’ claims,
court records show.
The bank wasn’t alone in drawing
Melius’ ire. In more than 225 state
and federal lawsuits over the years,
he revealed himself at times to be
impetuous and belligerent.
He sued his dry cleaner over $700
he said he left in his pants pocket (an
arbitrator ruled that Melius couldn’t
prove that someone had removed the
cash from his pants). He interrupted a
deposition over a leased Mercedes to
call a car salesman a “turd” and a
“low life.” In the deposition, the salesman described a phone call from
Melius this way: “more abuse, more
foul language, more threatening me
and my boss.”
In another lawsuit years later,
Melius confronted Matthew
Dollinger, an attorney for the developer Wilbur Breslin.
“You think you are a tough guy,
Matthew?” Melius said during a deposition. “You are not a tough guy.”
Melius then used a gay slur, adding,
“How’s that for an insult? A fat one.”
To those who know him — even
what successful sexploitation epic
“Flesh Gordon.”
Even Playboy hated it. More to the
point, Allegro said in an interview,
“We certainly didn’t make any money
on it.”
A new focus: tribal gambling
ASSOCIATED PRESS / MARIO SURIANI
NEWSDAY INVESTIGATION
B20
friends — Melius’ abrasiveness is no
surprise.
“I figured he’s got a lot of friends, but
he’s got a lot of enemies,” said an old
friend, John Nasseff, a former executive
and major stockholder of West, the
legal publishing company. “He sticks
his nose in everything and he steps on a
couple of toes.”
Then, cryptically and without
elaboration, he added: “And that’s
why they’ve tried to do him in a
couple of times.”
Various partners, ventures
Melius had a penchant for linking
up with questionable business partners, often in quixotic ventures.
Rather than team with Hartman
and other insiders as he had on previous real estate ventures, he went
outside the loop for a partner on two
deals at Mitchel Field, where Nassau
County leased properties to politically connected developers in giveaway deals.
His partner, Greg Hasho, was a
branch manager for an out-of-control
penny stock brokerage referred to in
Newsday as “The Wild Bunch” and
was married to the niece of Times
Square porn czar Matthew “Matty the
Horse” Ianniello, who later became
acting boss of the Genovese crime
family. The partnership faltered after
the federal Securities and Exchange
Commission accused the brokerage of
bilking clients of $1.4 million. In the
aftermath, Hasho declared bankruptcy and his partnership with
Melius faltered.
Three years later, the SEC barred
Hasho from any management or
ownership role with a securities firm.
Melius worked, too, with Paolo
Gucci, who had been banished from
the famous luxury brand family
after he helped send his father to
prison for tax evasion. Melius’
hopes of helping him build his own
fashion brand ended when Gucci,
who was jailed for failing to pay
Michael Olajide, left, takes on Knox
Brown in a middleweight bout in 1986.
child support and alimony, died
bankrupt in 1995.
Chet Forte, the original director of
“Monday Night Football,” was another star-crossed partner. Melius
was among several investors in a
proposed basketball TV show to be
produced by Forte that collapsed.
According to a court filing, when
television producers Peter Perrotta
and Louis LaRose Jr. arrived at Oheka
for a meeting on the project, they
were met by men armed with guns
and accompanied by pit bull guard
dogs. They said they were surprised
to find Melius in a poker game with
Forte, who, it turned out, was a ruinously compulsive gambler.
Melius won back his $130,000 investment from Forte in court.
Melius also tried his hand at boxing
management, joining with a former
nightclub singer, Joe Allegro, to manage a trio that included Trevor
Berbick, who years earlier had defeated Muhammad Ali in Ali’s last
fight. They set up another of their
fighters, Michael Olajide, a middleweight with a chronic vision problem in his right eye, in a super middleweight championship bout against
Tommy “Hitman” Hearns, the champion who was known as pound-forpound the hardest puncher in the
sport.
“I remember that first really hard
jab that he threw — bam!” Olajide
said in an interview. “He hit me in the
eye, and I just remember at that point
not being able to see anything coming
from one side.” After losing the fight,
he spent more than a year fighting in
court with Melius and his partner for
his share of the purse before he was
paid, court records show.
And then there was an investment
Melius and his partner, Allegro, made
in “Flesh Gordon Meets the Cosmic
Cheerleaders,” a sequel to the some-
By Melius’ own admission, an awful
lot wasn’t going his way in the ’90s.
“I think other than real estate, and I
have a whole list of things that I lost
my money in, every single one of
them,” he said in a Newsday interview.
So he headed north, to the desolate
upstate Akwesasne Indian reservation
spanning the Canadian border, where,
far from any city with a substantial
customer base, he saw promise in
tribal gambling.
The reservation is home to the St.
Regis Mohawks and has a fraught
history marked both by illicit trafficking in cigarettes, liquor and arms, and
divisions over gambling so intense
that two tribe members were killed in
a gunfight.
“The real estate market has gone
bad,” Melius explained to a Syracuse
reporter in October 1995. “I had my
trouble in it. Let me see if there’s
opportunity here.”
Melius became interested in gambling on Native American reservations around the time Congress
passed the Indian Gaming Regulatory
Act in 1988, providing a legal framework for tribal casinos.
At Oheka the effects were visible.
Local power brokers were joined by a
new set that included Michael Haney,
a leader of the American Indian Movement that besieged Wounded Knee;
William Kunstler, the famed left-wing
attorney who represented both tribes
and individual Native Americans; and
Moonface Bear, who would lead
Connecticut’s Golden Hill Paugussetts in an armed uprising in the early
1990s.
Melius formed companies with
names like Native American Management Corp. and Nassau County Native Americans Inc., founded to “promote Native American development
and secure their historical lands,”
according to planning documents
reviewed by Newsday.
According to business documents
and Native Americans who said he
discussed his plans with them, Melius
was unsuccessful in efforts to develop
casinos or otherwise do business with
the Shinnecock on Long Island, the
Seminole in Florida, the Kickapoo in
Oklahoma and the Schaghticoke in
Connecticut. He was involved in
failed efforts to get recognition for
tiny tribes, including the Poospatuck,
then consisting of 95 people living
near Mastic.
But he arrived at windswept Akwesasne with scant competition and the
financial muscle and respectability of
his partner, Ivan Kaufman, head of
the publicly traded Arbor Commercial Mortgage Trust, who has lent
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NICK CARDILLICCHIO
Seeking a tribal pact
Anthony Laughing in the mid-1990s.
killer, explained in an interview: “The
Gambinos was going to make good
money with the father. They’re telling
me that we’re going to do whatever to
help the kid because we want the
father.”
Borrello said he knew nothing
about any designs the Gambinos
might have had in a casino involving
him. “I work seven days a week, I
don’t really know nobody, they murdered my son, and I’m not on the
street,” he said in an interview.
Melius would pay him at least
$580,000 over the next six years,
according to records filed in federal
court, and Borrello recalled receiving other perks, too. He said they
included a private plane trip to
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
bino family as a conduit to the tribal
casino business — exactly what
Melius hired him to be.
Nicknamed “Mohawk John,” Borrello had done time for burglarizing
a gas station and fencing stolen cars
in the mid- to late 1980s. By his
account and those in court and law
enforcement records, his son, “Johnnie Boy” Borrello, was a Gambino
crime family associate murdered in
a mob rubout. According to Michael
“Mikey Scars” DiLeonardo, a former
Gambino capo, and John Alite, a
former mob associate, who have
both become federal witnesses, the
Gambinos had tried to protect the
younger Borrello to cultivate his
father.
Alite, who was convicted of attempting to murder Johnnie Boy’s
newsday.com
Melius more than $50 million over
the years through his privately held
companies.
The two formed President R.C.-St.
Regis Management Co., based in
Arbor’s Uniondale offices, and sought
authorization from the Mohawks to
build and operate the reservation’s
first legal casino in exchange for a
percentage of the profits. A confident
Melius told tribe members that the
casino would employ 800 people and
Kaufman predicted annual revenues
of $100 million.
To succeed, the company had to
win over the tribe’s troika of chiefs.
Here, Melius hired a “consultant”
named John Borrello, an ex-convict
from Queens who was half-Mohawk,
and who two former mobsters told
Newsday was coveted by the Gam-
Valerie Curotte, Borrello’s cousin,
said that during an early meeting
about the casino, at Melius’ Long
Island office, Melius discussed with
her the plans he and Borrello were
making. Melius stressed that his
associate’s role had to be kept quiet.
“He says to John, ‘You’ve got a
record longer than my arm,’ ” Curotte
recalled in an interview. “You can’t
really be on no paperwork.”
Borrello also introduced Melius to
another cousin, Anthony Laughing,
described in court documents and by
his own account as the boss of all
things political and criminal on the
reservation.
Laughing made millions smuggling
cigarettes to Canada, according to
court records and by his own admission. He poured the profits into what
he has said was Akwesasne’s first
full-scale — albeit illegal — casino in
1988, Tony’s Vegas International.
Convicted on federal gambling
charges, he spent time in prison and,
according to an FBI surveillance
report, returned to the cavernous
casino in gold and diamond jewelry
and alligator boots while federal
agents conducted surveillance.
“He was the Godfather up there,”
said retired FBI agent John McEligot,
who spent years investigating Laughing. “He was his own mafia on the
reservation.”
In an interview with Newsday
shortly before his death at 69 in October 2016, Laughing recalled Melius
hosting him at Oheka, plying him
with fancy dinners and Knicks playoffs tickets, and introducing him to
D’Amato at a Long Island law office.
The reason was obvious to him:
Three chiefs decided practically
everything on the reservation by
majority, and Laughing said two, L.
David Jacobs and John Loran, answered to him.
“I don’t know how to say this but
I’ll just come right out and say it,”
Laughing said. “I controlled the two
chiefs back then.”
Ever affable and energetic, Melius
worked a rotating cast of chiefs, who
faced election every three years.
“He was a busy little fella,” said
Jacobs, who visited Melius at Oheka.
“He certainly was very generous,
loaning his airplane to everybody and
giving everybody dinners.”
In the end, Jacobs and Loran — the
chiefs Laughing claimed to control —
outvoted their counterpart, Phil Tarbell, and pushed through a tribal
compact giving Melius and Kaufman’s
company management rights. Jacobs
and Loran insisted in interviews that
NEWSDAY INVESTIGATION
Akwesasne on which he played
poker with Melius, Paolo Gucci and
D’Amato, who was dropped off en
route for what Borrello described as
a “meeting with the power authority.”
B22
they had acted on their own and were
not beholden to Laughing.
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
NEWSDAY INVESTIGATION
Gaming commission investigates
Now, another challenge loomed:
approval of a contract to manage the
casino from the National Indian
Gaming Commission, the federal
agency established by Congress to
keep “organized crime and other
corrupting influences” from the
nascent industry.
Melius submitted more than 200
supporting letters from police chiefs,
politicians, clergymen and even former President Jimmy Carter, according to a court document his attorney
filed. Besides Carter, the document
did not name the other supporters
and the commission refused to provide Newsday the letters.
But they were overshadowed by the
commission’s staff investigation,
summed up in a 20-page memorandum completed in May 1996.
It recommended that Melius be
found unfit for casino management,
determining that his “reputation, habits
and associations pose a threat to the
public interest or to the effective regulation and control of gaming.”
The memorandum cited his repeated failure to provide detailed
financial information regarding his
casino-related companies, as well as
inconsistencies between his and his
wife’s income declarations. In addition, his $29 million estimate of personal assets, investigators determined, was largely based on his valuation of a bankrupt company; under a
reorganization plan, they said, unsecured creditors were to receive 5
percent of their claims.
In a compilation of his financial
and criminal problems, it detailed 15
state tax liens totaling almost
$470,000, as well as an IRS lien of
nearly $200,000 that remained unsatisfied until the commission investigation began. The memorandum cited
five corporate bankruptcies.
The gaming commission investigators also noted that among dozens of
judgments against Melius, several
stemmed from debts to casinos.
Then there was his early criminal
record. The memorandum listed five
arrests on a federal background
check, including his vacated felony
conviction:
In June 1962, Melius was charged
with petty larceny in a case involving
the theft of tires with a teenage
friend. There is no record of the
disposition.
In June 1963, he was charged with
robbery in the mugging of a hitchhiker and pleaded guilty a half-year
later to felony attempted second-degree grand larceny and was given a
suspended prison sentence of up to 5
years. Six years later, while on probation, Melius’ conviction was vacated
under a youthful offender law.
On Sept. 14, 1971, he was charged
with grand larceny in the extortion of
an undercover cop who posed as
having illegal drugs in her car. He
pleaded guilty and was later sentenced to 3 years of probation and
fined $1,000.
On Sept. 30, 1971, he was charged
with third-degree conspiracy and
first-degree criminal possession of
stolen property for his alleged role in
a car and heavy equipment theft ring.
Melius pleaded guilty to third-degree
conspiracy and was fined $500.
In October 1971, he was arrested for
second-degree grand larceny for
unknown reasons and the charge was
dismissed.
In a letter to a tribal chief a few
months after receipt of the memorandum, commission chairman Harold
Monteau stated that the contract to
manage the casino would not be
approved unless Melius was removed
from the management group. Monteau also said that the management
contract would not be approved if
Melius were engaged as a consultant.
After papers were drawn showing
Melius selling his interest to Kaufman
for $5 million, the commission approved the company’s contract with
the tribe. Kaufman declined to be
interviewed.
Melius maintains a role
Although the chairman’s decision
might have marked an end to Melius’
reservation foray, it did not.
He never left the Akwesasne reservation. Kaufman awarded a $14 million contract to build the casino to
the Anderson-Blake Construction
Corp. Melius owned the company.
The tribe contended in a 2002
lawsuit that Kaufman had failed to get
the gaming commission’s approval for
Melius to build the casino. The Mohawks were seeking to have the construction contract voided.
Kaufman and Melius responded that
tribal leaders had clearly been aware of
Melius’ role in constructing the casino.
They also said in legal filings that Kaufman had not been required to get permission from the Indian gaming commission to award the contract to
Melius’ company — a position that was
eventually confirmed by the commission’s top lawyer, who stated in a letter
in 2004 that the construction contract
had not required the commission chairman’s approval.
The Mohawks also argued in their
lawsuit that Melius had been enmeshed
in many details of the casino’s operation. They produced documents showing that Melius was often consulted on
the casino’s operations by President-R.C. St. Regis executives and that a
former state trooper was his personal
eyes and ears.
Records showed that Melius had
exchanged memos and faxes with
consultants and Arbor employees
about marketing strategy, security,
budget and other casino matters. Walter Horn, an Arbor attorney who served
as St. Regis’ general counsel and senior
vice president, asked Melius for comment on a loan document between the
tribe and President, for example. Horn
also faxed Melius internal memos
about casino marketing. John Natalone,
an Arbor executive, sent Melius financial forecasts.
In an October 1998 letter filed in
court, Melius sent congratulations to
Al Crary, a retired State Police captain, writing that when the casino
opened, “you will be hired as their
Security Consultant at a salary of
$50,000 per year.”
Other records show that Crary sent
Melius notes marked “FOR GARY
EYES ONLY,” on topics ranging from
observations about the ATM dollar
limits to well-sourced intelligence.
“The Indians north of the border are
well armed and the Mohawks are the
strongest of the lot,” he wrote in an
undated memo. “My informants tell
me of no discernible pattern of action
against the casino,” although he
added that he was concerned “that
you do everything you can in a defensive mode.”
In an interview, Crary said he had
not been hired by Melius or anyone
else at the casino. Of Melius, he said,
he would “just try to fill him in on
what was going on.”
Melius did not dispute his ownership of the construction company but
said in interviews and depositions
that he had not been involved in
either managing the casino or working as a consultant, which the gaming
commission had also made clear it
would not approve him to do.
“I was never involved with the
day-to-day running of the operation,”
he said in a 2014 Newsday interview.
A federal judge ultimately dismissed the tribe’s lawsuit, ruling that
Kaufman had not been required to get
permission from the gaming commission to hire Melius’ construction
company. Federal oversight over a
casino on an Indian reservation only
involves its management, the judge
said. It was the only issue before him.
The tribe’s lawsuit was one of
several over Melius’ interactions with
the tribe and the gaming commission,
including a suit filed by Kaufman and
Melius against the Mohawks. Melius
B23
had sunk about $30 million into Akwesasne and received “a zero return,”
Horn, the casino company’s senior
vice president, testified.
NEWSDAY INVESTIGATION
NEWSDAY / J. MICHAEL DOMBROSKI
Donald Trump inside Atlantic City’s
Trump Taj Mahal Casino in March 1990.
ment from the tribe.
Part of the Akwesasne water supply
was rendered undrinkable for an
extended period because, the tribe
alleged, a construction mistake by a
Melius subcontractor polluted it with
salt water. They reached a $500,000
settlement with Melius’ company and
the subcontractor, neither of which
acknowledged blame.
But, validating Thompson’s and
Ransom’s belief that the operation
could make money, the Akwesasne
casino remains open and it turns a
profit, thanks to a clientele that
largely includes Mohawks and seniors
arriving by bus from nearby places
like Plattsburgh.
After mountains of litigation, Melius
won a $4 million settlement from Goldberg’s company in 2002. Neither side
admitted any wrongdoing.
By the late 1990s, his evolution into
a Long Island power broker was
materializing through a chain of
events at Oheka Castle, where, as at
Akwesasne, he was involved with
legally entangled associates and ran
afoul of neighbors.
Some of his business associates
there were at least as questionable as
some of those at Akwesasne. The
official orders and rules he dodged
were far more plentiful than those at
the reservation. And he had neighbors who battled him every bit as
much as the Mohawks had.
But Oheka was on his home turf,
and he came out a winner.
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
If someone were to buy out Melius’
share in the company, Monteau indicated, he would be open to moving
forward, provided that Melius retained no financial interest in the
management.
The casino opened in 1999, an instant
financial flop. The mostly tribal staff
was slashed. After a year, former Chief
Alma Ransom said in a deposition,
Kaufman told her losses sometimes
reached $1 million a month.
Kaufman’s relationship with the
Mohawks nose-dived. Tribal leaders
accused him and his management team
of hiring untrained and uncertified staff
at the casino, providing inaccurate
revenue reporting and offering jackpots
that were awarded by mistake.
“They knew nothing about how to
run a casino, and that’s why they
were running into the problems,”
then-Chief Paul Thompson remarked
in a 2002 deposition.
By early 2000, Kaufman and others
Former St. Regis Mohawk chief
L. David Jacobs in October 2016.
newsday.com
also sued the commission at one
point over the information in the
staff’s memorandum, the one that
recommended he be found unfit to
manage the Akwesasne casino.
Melius’ suit was eventually dismissed, though it is not clear whether
there was a settlement. But in a letter to
Melius in June 2001, Montie Deer, who
was then chairman of the commission,
said the agency had “never made a
determination of your suitability to
participate in a management contract”
to operate the Akwesasne casino.
The commission, Deer wrote, “has
not taken action approving or disapproving a management contract to
which you were a party.”
That was accurate, though the
context was not explained in the
letter. Harold Monteau, who was the
commission chairman in 1996, wrote
a letter in which he said he would
disapprove the tribe’s proposed contract with the company created by
Melius and Kaufman because of the
commission’s concerns about Melius’
suitability to manage a casino.
The stories of Gary Melius’ life
seldom end simply. This one certainly
didn’t. It even featured a cameo by
Trump.
For help, Melius turned to D’Amato,
who introduced him to the country’s
most successful casino operator, a
high-rolling New Jersey businessman
named Arthur Goldberg. Goldberg
had little use for the Akwesasne
operation, but he wanted to team
with the tribe on another plan it was
involved in: a half-billion-dollar proposal in the Catskills for the closest
casino to New York City.
With a supporting affidavit from
D’Amato, Melius said in a lawsuit that
Goldberg had offered to pay him $15
million and bail out Kaufman if they
persuaded the Mohawks to install his
company as their new manager at
Akwesasne and open the way to a
Catskills partnership.
But as Kaufman and Melius went to
work, court records establish, they
were being played. Tribal leaders
testified that Goldberg told them
Melius had deceived federal authorities about his continued project involvement, cheated on construction
costs, siphoned away money that
should have been paid to contractors,
and bragged about having the tribal
council in his pocket.
“We were being burnt big time, and
we found out this place can make
money,” Ransom, then a chief, recalled in a deposition.
Before long, the tribe threw out
Kaufman’s management company and
teamed in the Catskills with Goldberg, who did not pay Melius or
Kaufman a dime.
There the Mohawks ran into
Trump, who feared their plan would
damage his Atlantic City businesses.
Soon local newspaper ads attributed to an anti-gambling group in
upstate Rome cautioned, “How much
do you really know about the St.
Regis Mohawk Indians?”
Another ad predicted Indian gambling would bring “increased crime,
broken families, bankruptcies, and, in
the case of the Mohawks, violence.”
In the end, nobody fared too well.
Goldberg died unexpectedly and
his Catskills casino was never built. A
state investigation found that Trump
had secretly financed the newspaper
ads and he was fined $250,000 in
2000 for violating lobbying laws.
More critically, his Atlantic City
casinos went bankrupt over the next
decade, even without Catskills competition.
The two chiefs who originally
backed Kaufman and Melius’ management were convicted on unrelated
charges stemming from huge illicit
smuggling operations. The one who
didn’t was convicted of stealing equip-
NEWSDAY / JOHN PARASKEVAS
A Catskills venture
NEWSDAY INVESTIGATION
B24
CHAPTER 4
THE RISE
OF OHEKA
CASTLE
BY SANDRA PEDDIE
sandra.peddie@newsday.com
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
C
hristopher Okada still remembers the mysterious call his
father, Naomi, a New York City
real estate broker, received from
Japan.
“All that my dad knew was that this
client was extremely wealthy and he
wanted castles,” Okada’s son, Christopher, recalled. “So my dad scouted
the tristate area, and there’s not a lot
of castles in the tristate area.”
But on the Gold Coast of Long
Island there was Oheka Castle, and
Gary Melius owned it.
He had bought the abandoned mansion in 1984 for about $1.5 million,
assuming ownership of what had been
the grandest of Gold Coast estates and
the second-largest residence in America. And he went to work, pouring
money into a meticulous restoration he
hoped would not only prove worthwhile on its own, but also would open
the way for the lucrative development
of 39 luxury condos.
His condo plan collapsed a few years
later, though, along with the real estate
and stock markets. His real estate
empire was crumbling. He turned his
attention to trying to transform the
castle into a destination, a place for
weddings, parties and other events.
Christopher Okada remembered
that in 1988 his father called Melius
on behalf of his new Japanese client.
It was the sort of moment people
hope for when they buy lottery tickets.
Melius would soon sell Oheka for a
recorded price that was 15 times higher
than what he bought it for — and get to
live there as caretaker to boot.
The conversation led to a deal that
eventually helped Melius emerge
from multiple bankruptcies and business setbacks and enshrined him as a
major player in Long Island’s politics
and social life.
Remarkable in itself, the transformation provides a lens into the workings
of Long Island politics and shows
how somebody who had nurtured
powerful people could overcome a
formidable array of obstacles to get
what he needed.
In Melius’ case, the obstacles included half a million dollars in unpaid
property taxes, 17 building and fire
code violations, vocal neighbors he
had infuriated, business partners who
ran afoul of the law, a decisive rejection by the Huntington Town Zoning
Board of Appeals and two judicial
orders against him, the last of which
temporarily shut down Oheka.
A billionaire investor
Okada’s mysterious client turned
out to be one of Japan’s most reviled
figures.
Hideki Yokoi, an aging billionaire
investor connected by the Japanese
media with the vicious Yakuza crime
syndicate, faced criminal negligence
charges after a fire in 1982 ripped
through a Tokyo hotel he owned
where he hadn’t installed sprinklers.
Thirty-three people died.
Worried about prison, Yokoi, who
denied Yakuza links, wanted to get
some of his assets out of Japan, and at
one point his family even invested them
in a purchase of the Empire State Building, with Donald Trump later joining as
a partner. He began buying castles and
other luxury residences in Europe and
the United States, according to court
testimony from a daughter, Kiiko Nakahara. She said that during the 1980s, she
took photos of European châteaux and
grand estates and sent them to Yokoi
for inspection.
Through Okada, Yokoi bought
Oheka for a recorded price of $22.5
million in 1988.
Then in 1993, Yokoi’s son-in-law,
Jean-Paul Renoir, who was married to
Nakahara, agreed to another deal, in
which Melius leased back Oheka for
$500,000 a year, records show, which
apparently covered property taxes,
maintenance and other operating
expenses.
Violating zoning codes
Oheka was zoned residential, ensconced in an exclusive neighborhood near Cold Spring Harbor. Beginning in the early 1990s, Melius defied
the zoning and began promoting the
castle for weddings and catered
events. He hosted private dinners and
parties. He used Oheka to impress
prospective business partners. He
hosted profit-making events like
wedding celebrations, a $300-a-seat
Debbie Gibson concert and even flea
markets.
He did this without town permits, a
working sprinkler system or fire
extinguishers, according to Huntington records.
A day after a 1994 “gala evening of
tribute” for Frank Grimes, then the
Huntington Democratic Party leader,
a fire inspector warned Melius in
writing to stop using Oheka as “a
place of public assembly” until he
obtained the required license.
Joseph Cassella, who was then
Huntington’s chief fire marshal, said
in an affidavit that “a potential
B25
NEWSDAY / JOHN KEATING
Print hed TK
catastrophe was barely averted”
when children at a bar mitzvah in
1995 were led into a darkened basement for a “Halloween experience.”
The basement was decorated with
combustible materials that caught
fire, then were extinguished, Cassella said.
Between 1994 and 1996, inspectors
repeatedly found Melius violating
zoning restrictions and codes.
Records reveal at least 17 citations for
illegal wedding receptions, blocked
hallways, deadbolts on exit doors,
plywood doors where fireproofing
was required, combustible debris and
unauthorized tree cutting.
Lawrence Cregan, who was then
town attorney, said he felt compelled
to take action against Oheka.
“You have to stand for something
in this world,” he said in a recent
interview. “I have to be able to
sleep at night. I have to be able to
face my children should something
ever come to question. I prefer to
do what’s right.”
On Oct. 24, 1995, the Huntington
Town Board voted to obtain a court
order compelling Melius to remedy
“dangerous conditions.”
Three days later, a judge granted an
injunction requiring Melius to comply with fire codes. He was ordered
to install emergency lighting and fire
stops, rehang fire doors, clear hallways and remove combustible debris.
Oheka lacked an operable sprinkler
system and so Melius was ordered to
install one. He settled the case by
agreeing to do so.
Tensions were high with neighbors,
too, who complained that speakers
boomed music so loud their homes
rattled. “We do not welcome another
summer of lounge lizard music,” a
neighbor, Sarah Dunn, wrote to the
town in 1996, adding, “the more sleep
I lose, the nastier I get.”
On top of this, Melius had fallen far
behind on property taxes. By 1997, he
owed $668,557, tax records show.
Melius argued in a deposition that
he was in compliance with zoning
regulations because he believed there
were no restrictions on renting out
the residence. The weddings, parties
and other events were legal, he insisted, because they were private
affairs, including the flea markets and
Debbie Gibson concert.
For a private residence, though,
Oheka was quite busy. During a sixmonth stretch in 1996, 39 weddings
and a Sweet 16 party were scheduled,
according to documents filed with
the court.
The town went back to court; in
July 1996, another judge, Suffolk
Gary Melius at Oheka in October 1995.
Supreme Court Justice Howard
Berler, found Melius had failed to
uphold the earlier “unambiguous”
court order. He ordered Oheka shut
down until Melius met fire safety
codes.
In December 1996, a half-year after
the court order shutting down Oheka,
Melius asked the Huntington Town
Zoning Board of Appeals for a variance allowing the castle to be used
commercially. He was turned down.
A new offensive
For owners hoping to win a zoning
change, such a record of noncompliance would prove daunting. And
Oheka’s circumstances were worse
than they looked on the surface.
CONTINUES on B26
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
Political lifeline to Huntington
Despite his financial struggles in
the ’90s, Melius still managed to
finance his political lifeline, particularly in Huntington. Considered
broadly, between 1985 and 2000,
Melius, his family, his companies and
employees contributed at least
$180,515 to federal, state and local
political campaigns, according to
campaign finance records. They are
incomplete because local campaign
records are available only as far back
as 2006 and state and federal records
go back only to the 1980s.
A Gannett Suburban Newspapers
survey of corporate contributors that
exceeded legal limits found that in 1995,
the state’s worst offender was Melius’
Oheka Management Corp., which had
exceeded the limits by $21,265.
“Who the hell knew anything about
this?” Melius said in a Newsday inter-
NASSAU COUNTY CLERK
Melius was leasing the castle, but
its ownership was murky and being
contested. The castle was held either
by Yokoi, the billionaire who served 2
years in a Japanese prison in the
mid-1990s after the calamitous Tokyo
hotel fire, or by his daughter, Nakahara, and her husband, Renoir, who
had each done prison time during a
family battle over Yokoi’s vast real
estate holdings in Europe and the
United States.
After Yokoi filed fraud charges
against them in France, Nakahara
spent a year in a French jail and
Renoir spent more than 2 years in
American prisons fighting extradition. The French authorities eventually dropped the extradition request,
freeing Renoir — but not before
Nakahara was accused by irate mayors in nine French towns of having
stripped the castles her father had
purchased of marble, statues, tapestries and nearly anything else of
value. She was not charged by French
authorities.
But in Huntington, Melius was
playing on his home field and determined to find a way to operate Oheka
commercially. What emerged was
something new for Melius and far
more sophisticated.
He fashioned a new offensive that
early on included a flash of his traditional aggressiveness — a $10 million
libel suit against his most persistent
and quotable critic, his neighbor
Sarah Dunn, an environmental consultant who filed noise complaints and
spoke up at council meetings.
But he also paid special attention to
his public image, which was honed to
portray him as a committed preservationist intent on reclaiming a piece of
Long Island history for the public’s
benefit. Town board members who
had long benefited from his political
contributions and friendship would
eventually allow commercial use,
despite his history of violating town
codes and judicial orders, and not
paying his taxes.
Gary Melius filed a $10 million libel
suit against Sarah Dunn, his neighbor
who had filed noise complaints.
ASSOCIATED PRESS
NEWSDAY INVESTIGATION
B26
Japanese billionaire Hideki Yokoi, seen
in New York in 1995, bought Oheka.
view at the time. “I called four
lawyers, and nobody knew this, so
how the heck am I supposed to know?
Stupidity they could charge me with.
I plead guilty.”
Existing records and news articles
revealed that over the years Melius, his
family members, companies and employees have contributed a substantial
part of their combined campaign donations through 2017 — at least $214,067
— to political committees and elected
officials from Huntington.
In the last dozen years, Melius, his
former son-in-law and his companies
gave $33,742 to Frank Petrone, according to records. Melius also hosted
parties at Oheka for Petrone, who was
the Huntington supervisor for 24
years. He did not seek a seventh term
last year.
Melius became Huntington Councilman Mark Cuthbertson’s biggest
donor, giving him at least $31,300,
based on campaign records.
Steve Israel, a Huntington councilman in 1997 before his election to
Congress, received at least $33,200 in
donations from Melius and his family
for his congressional campaigns. A
dominant figure in local Democratic
politics as a fundraiser and strategist
and a longtime friend of Melius, he
held the wedding of a daughter at
Oheka in 2013.
Israel did not respond to requests
for an interview and it’s unknown if
the wedding was discounted, a favor
Melius frequently offered to friends
and political allies.
Councilwoman Marlene Budd, who
joined the town board in 1996 and
married Israel in 2003, became
Melius’ lawyer in 1998. She abstained
from voting on Oheka matters after
that. Budd later became a Family
Court judge.
A Melius company, ArchCon, designed plans in 2004 for a remodeling
project in the Dix Hills home Budd
shared with Israel, her then-husband.
Melius also held in-kind fundraisers
at Oheka — in which services are
donated — for Israel and Budd.
In addition, since 2005, the Huntington Town Democratic Committee has
received at least $25,500 from Melius
and his family members. Israel, Budd
and Cuthbertson are all Democrats.
Petrone changed parties to become a
Democrat in 2002.
‘The floating castle district’
Despite this record of support,
Melius faced a daunting prospect
when he tried once again to legalize
the castle’s operations. Residents of
Oheka’s quiet upscale neighborhood,
still upset by traffic, noise and previous battles with Melius, had mobilized against him. They collected 300
signatures on a petition against his
plans and hired an attorney, John
Flanagan, currently the Republican
majority leader of the State Senate, to
fight him.
In place of the obstructionism of
the past, Melius retained a respected
former town attorney and zoning
expert, Arthur Goldstein, who aside
from his formidable expertise was
known for his charm, humor and
personal modesty.
Goldstein also knew more about
the town zoning code than anyone
else because he had written it. For
Melius, he invented a new zoning
category tailor-made for Oheka. It
was confined to officially designated
historic properties of more than 15
acres. That description fit only
Oheka. It was crafted to allow com-
Huntington Town Supervisor Frank
Petrone with 2008 Miss New York
contestants at Oheka in July 2008.
mercial use in the name of generating
revenue to assist in what was now
portrayed as Melius’ singular mission,
preservation.
Goldstein called the category a
“historic overlay district.” In Huntington, as in many areas, there is a firm
prohibition against what is known as
“spot zoning” — a zoning designation
that applies to only one property.
While Oheka was the only property
affected, the “overlay district” did not
directly refer to Oheka.
Among town officials it was known
as “the floating castle district.”
Goldstein launched a charm offensive, meeting with neighbors, and
received big support from Ellen
Berkowitz Schaffer, an assistant town
attorney and a local civic leader, and
Joan Cergol, a public relations specialist. Five years later, Cergol became a
special assistant to Petrone. In December, she was appointed to the town
board.
CONTINUES on B28
B27
NEWSDAY / JIM PEPPLER
NEWSDAY INVESTIGATION
CampaigndonationsbyMelius,familyandhiscompanies
BY MATT CLARK
matt.clark@newsday.com
Candidate or committee
contributions
! Nassau County Democratic Party
$79,000
! Freeport Mayor Andrew Hardwick
(D) $62,435.93
! Suffolk County Executive Steve Levy
(D) $61,300
! Suffolk County Executive Steve
Bellone (D) $53,370.20
! Rep. Peter King (R) $35,400
! Hempstead Democratic Party
$34,860
! Huntington Supervisor Frank
Petrone (D) $33,742.35
! Rep. Steve Israel (D) $33,200
! NewYorkGov.Eliot Spitzer(D)$32,321
! Huntington Councilman Mark Cuthbertson (D) $31,300
The contributions to Hardwick by
Melius, his family and his businesses
were primarily for his aborted thirdparty run for Nassau County executive,
which was widely believed to have been
designed to siphon votes away from
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
Thomas Suozzi, the Democrat challenging Republican incumbent Nassau
County Executive Edward Mangano, a
Melius ally. Contributions to Cuthbertson, Petrone and Israel were among
$214,067 in contributions to political
committees and elected officials from
Huntington. The vast majority of the
other contributions to Democratic
candidates and committees occurred
before Melius and Nassau County
Democratic Party chairman Jay Jacobs
began feuding over various issues.
Other major recipients include
Mangano, who received $21,400; former
Democratic Suffolk County Legis. Lou
D’Amaro, who received $17,112.09;
former Republican Sen. Alfonse
D’Amato, who received $17,000; Suozzi,
who received $15,000; and former
Nassau District Attorney Kathleen Rice,
a Democrat, who received $13,300, but
then declined to accept contributions
linked to Melius in her successful congressional campaign in 2014.
newsday.com
Theatleast $1.3millioninpolitical
contributionsNewsdaylinkedtoGary
Melius,his familymembers,hiscompaniesand hisemployeesarelikelyonlya
portionofhis campaign donationsover
theyears.
Newsday reviewed federal contribution records, which date to 1980, and
state candidate and committee
records, which go back to 1986.
Contributions to county, town, city
and village candidates are available
going back only to 2006, however.
That’s when electronic filing began to
be required and older paper records for
local contributions have since been
destroyed. Newsday was able to incorporate some older local contributions
Melius made that were detailed in a
1995 newspaper report.
More than 1,100 contributions were
found in Newsday’s review of the politi-
cal contributions by Melius, his family
members, his companies and his
employees. Here is a breakdown by
political party, including contributions
to committees unaffiliated with a party.
! Democratic $755,604.27
! Republican $461,255.58
! Conservative $38,850
! Unaffiliated $36,145
! Independence $18,450
The largest sums to individual
candidates and political party committees are detailed below. The totals
include contributions made to campaigns for any office candidates
sought. Behind the bare numbers are
several deeper and more complicated
stories of Long Island politics and
Melius’ involvement with it. For example, Andrew Hardwick, a registered
Democrat, attempted to run as a
third-party candidate for Nassau
County executive in 2013. Each candidate’s last elected position and current political party is listed below.
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
NEWSDAY INVESTIGATION
B28
Under her guidance, the castle
was opened for public tours that
filled up with schoolchildren and
town residents.
A nonprofit, Friends of Oheka, was
created to support and accept donations for the restoration. Several years
earlier, Melius had named Schaffer, a
close friend, the castle’s curator. She
was deeply involved in creating
Friends of Oheka and later became its
board president.
“The truth was that he performed
miracles there and saved us from the
horrors of an empty building that was
attracting teenagers,” Schaffer said in
an interview.
Melius began connecting with the
influential Cold Spring Hills Civic
Association. He invited members to
Oheka and allowed them to hold free
parties there, as well as association
meetings. He hosted holiday events
for neighborhood children.
Schaffer was the civic association’s
past president and an adviser to its
board. At her urging, it decided to
support Friends of Oheka, arguing
that Melius needed an ample revenue
stream for the restoration.
Goldstein took note of neighborhood
concerns and acknowledged them in
the restrictions that accompanied the
new zoning category. The final proposal allowed for the hosting of only
one event at a time, with no more than
220 guests. The castle’s exterior could
not be altered and only one small
“Oheka” sign was permitted. Perhaps
most significantly, the building could
not be expanded, limiting the possibility of truly large events.
By the time the town board took up
Goldstein’s proposed new zoning
category in December 1997, civic
association members were holding
their meetings at Oheka, residents
were touring the castle and their
children were attending spectacular
holiday parties there.
The resolution to approve the
“floating castle zone” was sponsored
by Petrone, Huntington’s supervisor.
News accounts reported that hundreds attended the board’s hearing,
with 19 speakers, according to the
official transcript. Civic association
members and professional experts on
Melius’ team were among those who
spoke in support.
Because she was a town attorney,
Schaffer said at the meeting that it
would be “totally inappropriate for
me to comment.” She then presented a slideshow on the castle’s
history.
Ted Owens, then the president of
Friends of Oheka, told the board that
permitting “some limited commercial
use” was essential to the castle’s survival. “It is only these operations that
do generate enough money to maintain
and restore the building,” he commented. He said, though, that the operations had to be limited, as they were in
the proposed restrictions, to minimize
the impact on the neighborhood.
Among the opponents was Dunn,
the target of Melius’ $10 million
suit. She said she wondered why
the board would even consider a
zoning provision for Melius after he
had ignored safety and zoning regulations for years. She asked why
they would allow him to operate a
large business in a residential neighborhood, disrupting the quiet life
she and her neighbors had once
enjoyed.
“I don’t understand how zoning
codes and fire codes and safety laws go
completely unchecked,” Dunn said. “I
don’t understand how property taxes
remain in arrears, yet this board continues to entertain this application. None
of this seems to matter.”
And she expressed astonishment
that no one on the town board felt
compelled to come to her defense
after Melius’ libel lawsuit, which was
based on her public comments and
her correspondence to the town as a
Huntington citizen.
“He seeks out his most vocal opponent and sues her for $10 million, and
what does the town board have to say
about that?” she said in frustration.
“Nothing.”
In the end, the board voted unanimously to approve the new zoning
category that allowed commercial
use of Oheka, a little more than a
year after the zoning board had
rejected Melius’ last attempt. In
addition to Petrone, board members
Budd, Israel, Donald Musnug and
Susan Scarpati-Reilly approved the
zoning.
The board’s action, Petrone said,
enabled the castle to become “a benefit to that community.”
The complaints about noise and
fire hazards were routine in issues of
this sort and Melius’ donations had
nothing to do with the council members’ votes, he said.
Petrone said Melius worked hard
to win over the community. “That
was Gary’s basic mode of opera-
B29
JOHNNY MILANO
NEWSDAY INVESTIGATION
NEWSDAY / AUDREY C. TIERNAN
NEWSDAY / THOMAS A. FERRARA
The Oheka Castle formal entryway in 2013.
The libel suit against Dunn, who
declined to be interviewed for this
story, was eventually settled. She
moved out of the neighborhood.
But at the tumultuous hearing, she
cautioned that the zoning change was
likely the first step toward something
further. “I have a very strong feeling
that he is just getting warmed up,”
she said.
She was right. Virtually every important restriction enacted in 1997
was eliminated or eased over the next
few years.
In 2002, the board relaxed the limit
on the number of guests at events and
removed the ban on building expansion.
In 2003, it allowed construction of
a temporary banquet facility.
In 2004, it permitted Melius to add
signs and approved operation of a
50-room hotel and a health spa, which
has yet to be built.
Petrone said that while he couldn’t
remember specifics, the changes had
community support. “Anything that
took place at Oheka the community
was involved in and spoke for,” he said.
Melius portrayed things similarly.
His neighbors, he said, told the board,
“Give him what he wants. We trust
him.”
Soon, the number of events was
burgeoning. Celebrity weddings hit
the entertainment pages regularly.
John Gotti Jr.’s lawyer promoted
boxing matches through a company
called Explosion Promotions. Political
Gary Melius at Oheka in August 2014.
meet-and-greets became a staple.
The board’s decisions were worth
tens of millions of dollars.
Melius repurchased the castle from
Yokoi’s family during a booming real
estate market in 2003. He paid $6.9
million, roughly $15 million less than
the recorded price that Yokoi had
paid 15 years earlier.
But Melius still held onto an idea for
a bigger score — a condo development
on the grounds, on a far grander scale
than he had envisioned years before.
By now, he had demonstrated that
he was a bona fide political player.
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
Restrictions eased
The Oheka Castle library in March
2008. Above the fireplace is a portrait
of Otto Hermann Kahn, who built
Oheka, which is an acronym of his name.
newsday.com
tion,” he said. “He would come in
and want to be part of the political
process. My guess? He probably
contributed to all the politicians on
Long Island.”
NEWSDAY INVESTIGATION
B30
CHAPTER 5
A
MULTIMILLION
DOLLAR
TAXPAYER
BAILOUT
BY WILL VAN SANT
will.vansant@newsday.com
newsday.com
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
Milburn
Creek
LIRR
27
kside
N. Broo
Ave.
Freeport
.
Ave
urn
Milb
F
reeport Village Attorney
Howard Colton went to police
in July 2009 with a startling
accusation: Gary Melius was verbally
threatening him and he feared for his
safety and that of his family.
At the time, Melius was trying to
resolve a long-standing legal dispute
with the village over his Brooklyn
Water Works property, a 4-acre site
that he had tried unsuccessfully to
develop for two decades and wanted
to sell.
Colton told Freeport’s police chief
by email that Melius was “pressuring”
him to force a settlement and claimed
to have incriminating recordings and
the clout to get him indicted. Melius
was using the Nassau County district
attorney’s office and its chief investigator, Chuck Ribando, as “his private
police force,” Colton wrote.
By the time Colton leveled his
charge, Melius had remade Oheka
Castle into a magnet that drew political, business and law enforcement
elites from across Long Island and
catapulted himself to a new level of
influence. Melius was now more than
a man with influential friends; he was
a power broker.
To unburden himself of the moneylosing Water Works, Melius worked
the levers of electoral politics. In
Brooklyn Water Works site
Sunrise Hwy.
Freeport
High School
Freeport, he put his political weight
and pocketbook behind the successful
mayoral campaign of Andrew Hardwick, a five-time loser in previous
election efforts. Then, after donating
$15,000 to the re-election campaign of
Democratic Nassau County Executive
Thomas Suozzi, he pivoted to Republican Edward Mangano after his surprise 2009 victory over the incumbent. Melius made a $2,500 donation
to the apparent victor before Suozzi
even conceded in December.
Melius estimated in a 2012 interview that Water Works had cost him
$13 million over the years. At one
point his tax and mortgage liabilities
on Water Works exceeded $3 million.
Moreover, village residents largely
opposed his development plans as
too large and intrusive for the neighborhood, and he’d failed to find a
private buyer.
Melius looked to the Hardwick and
Mangano administrations for help.
They would come to Melius’ aid by
spending a combined $11 million in
taxpayer money, all of which went
into the pocket of the castle owner or
to his various creditors.
That figure includes a $3.5 million
legal settlement that Hardwick spearheaded despite acknowledging the
conflict in his personal relationship
with Melius, a $900,000 tax refund
from the village, a $500,000 settlement that county officials declined to
discuss when it was reached, and $6.2
million that Nassau paid to purchase
Water Works — an amount three
times the county assessor’s estimated
market value.
The Mangano administration justified the inflated price by saying that
Melius had won valuable development approvals, when, in fact, the
village had denied him a building
permit.
Powerful figures using the public
purse to satisfy private ends is not a
new story in Nassau. But Melius’
maneuvers with Hardwick and
Mangano stand out as a brazen display of political muscle.
Melius declined repeated interview
requests for this story. In previous
public statements, he described himself as a victim of unscrupulous village officials who had tried to “steal”
the property from him.
“I just want to get out,” Melius told
Newsday the year before Nassau
bought Water Works. “I want to sell it.”
The multimillion-dollar taxpayer
bailout that Melius secured shocked
even veterans of Long Island business
and politics.
Desmond Ryan, the retired longtime leader of the Association for a
Better Long Island, a real estate trade
group, said the county’s purchase of
Water Works was a “deal to die for”
that left him and others in the industry “stunned.”
B31
NEWSDAY INVESTIGATION
NEWSDAY / BILL DAVIS
A multimillion-dollar taxpayer bailout
A frustrating money-loser
when liens, which can be purchased
by private investors, put him at risk of
losing the property, according to a
lawsuit.
Melius’ ownership was briefly in
question after a group of private tax
lien investors obtained deeds, but a
judge in 2006 declared Melius the
rightful owner, saying he’d not been
properly notified of deadlines he
faced to pay the liens off.
Even so, Melius in 2008 sued the
village, Glacken, other village officials
and Nassau County, alleging a conspiracy to steal Water Works by secretly
transferring the tax liens to the investors. Melius had first raised his
allegations years before, and FBI
investigators began questioning those
involved in 2006, according to court
The Brooklyn Water Works site in
Freeport in March 1998.
records.
At a campaign event in early 2009,
Glacken told village residents that
Melius’ conspiracy lawsuit was an
attempt “to extort money from you.”
Melius sued Glacken for defamation
and lost the case at the state appellate
level.
Hardwick becomes mayor
Melius needed a friendlier administration in Freeport. And Hardwick, an
aspiring politician with a pugnacious
style, needed help if he was ever to
win an election.
CONTINUES on B33
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
In the 19th century, the City of
Brooklyn undertook a massive public
works project to supply its residents
with water from Long Island.
The project’s largest pumping
station — a Romanesque Revival
redbrick structure with castle-like
towers and huge arching windows —
was built near Freeport’s Milburn
Creek. Throughout the 20th century,
the station, known as Brooklyn Water
Works, was used less and less and
was shut down in the 1970s.
Melius saw opportunity in the
station’s ruins in 1986 when he purchased the then-county-owned property for $1.4 million. But Water Works
quickly proved a frustrating moneyloser. Melius feuded with village
mayors and residents over development proposals and saw deal after
deal dissolve into lawsuits as the
once-grand structure slowly collapsed, becoming a graffiti-covered
eyesore.
Melius came to bemoan the purchase and engaged in a long battle
with then-Mayor William Glacken
over property tax payments. What
Melius’ attorney dubbed a “business
decision” for Water Works involved
remaining delinquent on his village
and county taxes, making good only
newsday.com
“You buy this piece of property,
you don’t get what you want and now
you want to unload it back on the
county?” Ryan said. “What, are you
kidding me?”
NEWSDAY / CHRIS WARE
NEWSDAY INVESTIGATION
B32
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
Melius, Hardwick and an FBI wire
BY WILL VAN SANT
will.vansant@newsday.com
In 2010, an FBI wire caught Gary
Melius and Freeport Mayor Andrew
Hardwick appealing for the Freeport
Police Benevolent Association president’s support of a personnel move
within the village police department.
The influential PBA president, Shawn
Randall, said in a deposition the following
year that in a conversation he recorded,
Melius and Hardwick had offered to help
his union’s members obtain foreclosed
homes in the village.
Randall gave the deposition in a fed-
eral civil rights case brought against
Hardwick and the village alleging discrimination in the police department. His
account reveals the extraordinary degree
to which Melius, a private citizen, was
involved in the workings of Freeport
government.
Randall testified that he’d been approached by Michael Craft, who was
then an FBI special agent and said he
was trying to build a public corruption
case against Hardwick. Craft asked him
to record conversations with Hardwick,
Randall said.
Randall said he wore a wire at a meeting Melius had arranged that included
Hardwick. Randall testified that the
conversation “went on for hours” and
that Hardwick and Melius were focused
on getting him to back the promotion of
a detective who was a Hardwick favorite
to be assistant chief.
The two men made an offer to Randall, he testified, telling him “they would
help PBA members get” as many as
400 foreclosed homes.
“Help them purchase the homes?” an
attorney asked Randall.
“Yes,” Randall said.
“And how would they help? When you
say ‘they,’ who are you referring to?”
“Both of them.”
Andrew Hardwick in July 2012.
“Gary Melius and Mayor Hardwick?”
“Yes.”
“And how would they help the PBA
members purchase the homes?”
“I didn’t ask.”
Randall testified that he had refused
to support the detective’s promotion,
citing a lack of experience. The detective
was not promoted.
Neither Randall, who is still the PBA
leader, nor Craft agreed to be interviewed.
Hardwick was not charged with any
crime by the federal authorities.
The case in which Randall testified,
which involved accusations of discriminatory hiring in the Freeport Police Department, is continuing.
Schlesinger and Hardwick declined
to be interviewed.
Gary Melius inside the Brooklyn Water
Works site in January 1990.
Howard Colton in February 2017.
CONTINUES on B34
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
“status report” on settlement talks, he
wrote. When Colton told him that no
report was ready, according to the
complaint, Melius exploded. “You
don’t know who you are [expletive]
with,” Colton said Melius yelled. “I’m
coming after you. I’m going to get
you. I’m going to get you indicted and
the rest of you [expletive].”
Many people who have interacted
with Melius over the years, including
business adversaries, have experienced this boorish and bullying side.
“If you punch me in the nose, I am
going to punch you back,” Melius told
Newsday editors in April 2017.
According to Det. Sgt. Raymond
Horton’s summary of what Colton
told him, the village attorney brought
Melius’ alleged tirade to Hardwick’s
attention. Colton “reported that
Mayor Hardwick had told him that
Gary Melius has an anger management problem and to let cooler heads
prevail,” the sergeant wrote.
In his complaint, Colton requested
newsday.com
Freeport Village Attorney Colton
charged that within weeks of Hardwick taking office in April 2009,
Melius’ intimidation campaign began,
according to internal records and
emails that Newsday obtained.
Melius first unnerved Colton by
instructing him to report to the Nassau district attorney’s office, according to an email the attorney sent in
July of that year to then-village Police
Chief Michael Woodward. Colton
wrote that Melius told him he was
“personal friends” with the office’s
chief investigator, Chuck Ribando,
and that an indictment “is coming” of
Colton’s predecessor, Joe Edwards.
“Melius informed me that I should
go in on my own before, ‘they come
and get you,’ ” Colton wrote to the
police chief.
Edwards, also a Melius adversary
over Water Works, was never indicted. He did not return calls for
comment.
Ribando was a retired 20-year
NYPD veteran when he joined the
Nassau district attorney’s office in
2006 to lead the investigations division. He was a regular at Oheka,
according to Melius and castle guests
in law enforcement. When a wedding
reception for Ribando’s daughter was
held at Oheka in 2012, an overnight
affair that saw all the castle’s hotel
rooms booked, Melius said he
charged a discount. In a 2014 interview, Melius said that he had been
unable to book an event for that date,
and that under such circumstances,
he typically lowers his prices.
Melius kept calling in the summer
of 2009, according to Colton, and on
July 22 Colton filed a formal complaint with village police. Melius had
phoned him that day and asked for a
NEWSDAY / THOMAS A. FERRARA
Allegations of intimidation
that no further action be taken in the
matter, but then followed up with an
email to Chief Woodward that detailed these events:
On July 28, 2009, after he said he
and Ribando had exchanged telephone calls, Colton wrote that the
two met and Ribando questioned him
about the alleged tax lien scheme that
Melius argued was designed to defraud him of Water Works. Colton
said he told Ribando he had little
knowledge of the matter and was not
involved.
Colton told the chief: “Melius has
made several veiled threats at me in
the hopes of pressuring me to force a
settlement of the Water Works civil
litigation,” he wrote. “Melius has
informed others that he has tape
recordings of me, but when asked to
produce them, he cannot. . . . It is
obvious that this is being used as a
pressure tactic.”
The following day, July 29, Colton
met with Hardwick and Melius at the
Grand Lux Café in Garden City to
talk about the settlement, according
to the email. During the meeting,
Colton wrote that Melius took a call
from a man named “Chuck” who
“clearly” was Ribando.
“I have concerns that the County
DA’s Office has been corrupted by
Melius and he is using them as his
private police force,” Colton wrote to
Woodward.
The district attorney’s office said
that it never received a complaint
from Colton or Freeport police about
Melius’ conduct and his ties to
Ribando, who declined to be interviewed for this story. However, another public official notified the
district attorney’s office of Colton’s
concerns, according to emails Newsday reviewed.
At the time Colton lodged his complaint, Kathleen Rice, now a congresswoman, was Nassau district attorney.
Her spokesman Coleman Lamb said
in an email that any suggestion
Melius had corrupted the office was
“ludicrous.” Lamb added that he
could not “speak for Chuck Ribando,
but I can certainly say that he did not
run the DA’s Office. He had bosses,
and he couldn’t indict anyone.”
A month after Colton’s July 29
meeting at the Grand Lux Café, and
after years of antagonism, it became
clear that Freeport’s posture toward
Melius had undergone a striking
reversal, as would the village attorney’s. The village agreed to settle its
tax dispute with Melius by reducing
the assessments levied on Water
Works over the prior decade and
cutting him a $900,000 refund check.
Six weeks after the meeting, the
village settled Melius’ conspiracy
lawsuit for $3.5 million.
Hardwick pushed for the settlement, Mayor Kennedy said. Attorneys
close to Hardwick presented cost
estimates justifying the move,
NEWSDAY INVESTIGATION
NEWSDAY / J. CONRAD WILLIAMS JR.
B33
A captain in Freeport’s volunteer
fire department and former assistant
to two Freeport mayors, Hardwick
lost a race for state Assembly in 1994
as a Republican; failed to make the
ballot in 1995 and 1997 after holding
himself out as a potential candidate
for Nassau Legislature; then lost a
race for village trustee in 1999 and
unsuccessfully challenged Glacken
for mayor in 2005.
He filed to challenge Glacken again
in 2009 — this time with Melius as an
ally.
Melius asked Nassau Democratic
leader Jay Jacobs to back Hardwick.
Jacobs recalls being reluctant.
Glacken, however, was a Republican.
Melius had given the Nassau Democratic Party nearly $40,000 in the
previous three years. Jacobs and the
party gave Hardwick $3,580.
Two weeks before Election Day,
Hardwick received a combined $2,997
in donations from Melius’ wife, daughter and former son-in-law, Richard
Bellando, records show. The donations plus Jacobs’ money totaled
nearly a third of what Hardwick
raised.
On Election Day, workers from
Oheka Castle were out campaigning
for Hardwick, according to current
Mayor Robert Kennedy, who ran on a
slate with Hardwick for village
trustee. Hardwick won by 328 votes
of 5,842 cast.
Hardwick’s combative streak and
sometimes curious actions during his
single mayoral term would cause
controversy. Here’s a sampling:
When sworn in, he had a band play
“Hail to the Chief,” which is used to
announce the president of the United
States. During his first weeks in office
he had the village hire a private security team to guard him at a cost of
nearly $10,000, citing unspecified
threats. He and an aide toured China
on a “trade trip” paid for by the village. He used the village’s automated
phone system to contact residents
with a recorded call that attacked a
political opponent. He apologized
after hosting the vice president of El
Salvador, who had participated in
anti-American protests after 9/11. And
in his unsuccessful re-election effort,
he sent out a mailer falsely claiming
that he had the personal endorsement
of then-President Barack Obama.
As mayor, Hardwick, a regular at
Oheka Castle parties that drew cops
and politicians, worked to resolve
Melius’ Water Works woes and put
millions of dollars in the pockets of
the castle owner and a close Melius
ally.
Three months after Hardwick’s
swearing-in, the village retained
Steven Schlesinger’s law firm as an
outside counsel. A Melius poker pal
whose 2014 wedding was held at
Oheka, Schlesinger was then the
Nassau Democratic Party attorney.
Records show that his firm collected
$1.1 million from cases it was assigned
during Hardwick’s single term.
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
NEWSDAY / MICHAEL E. ACH
NEWSDAY INVESTIGATION
B34
Incoming Nassau County Executive
Republican Edward Mangano on Dec.
2, 2009, the day after incumbent
Thomas Suozzi conceded the election.
Kennedy recalled, suggesting that if
the village lost, it would have to pay
attorney fees for both sides, which
could total at least $4 million on top
of any judgment for Melius.
When the settlement was voted on,
two trustees abstained. Hardwick and
his two running mates, including
Kennedy, voted for the deal.
In a written disclosure filed with
the village, Hardwick acknowledged
that he had a potential conflict of
interest. Melius was “personally
known to me,” he wrote, and as a
result he would “prefer to abstain.”
But without his vote, the settlement
would fail, Hardwick said, exposing
the village to the risk of “burdensome
taxes or, in the worst case, a potential
municipal bankruptcy.”
Glacken, the former mayor who is
himself an attorney, said in an interview that the village had no liability
and Melius no case. Glacken said
Melius’ lawyers had not even deposed
him or other defendants. The Hardwick administration “just rammed
this thing through,” he said.
“If I had still been there, we would
not have settled the case,” Glacken
said. “We would not have given them
a dime.”
tives; state and county police officers;
Robert Hart, the former head of Long
Island’s FBI office and then-chief
investigator for State Attorney General Eric T. Schneiderman; FBI
agents; Rice; and Ribando.
In August 2010, Freeport put Colton’s
father, a prominent rabbi, on its payroll
as a $150-an-hour community liaison.
Melius also hired Colton’s father as a
consultant for Oheka Castle, according
to the attorney’s deposition in the
discrimination case.
A personal spokesman for Colton,
John McDonald, initially said Colton
declined to be interviewed because of a
cooperation agreement with federal
law enforcement. McDonald declined
to say what the cooperation concerned
then insisted after the fact that his
comments had been off the record.
Then, more than 48 hours after this
story appeared online, he contacted
Newsday to clarify that Colton is a
witness for the FBI and that on advice
of his counsel, Colton could not comment.
A relationship thaws
A bond with Mangano
By summer 2010, the relationship
between Colton and Melius had undergone a remarkable change. No
longer an adversary, Melius had become Colton’s regular host and the
attorney began attending twicemonthly dinners at Oheka, according
to a deposition he gave the following
year.
In an unrelated case involving
allegations of discrimination in the
Freeport Police Department, Colton
said in 2011 that Oheka dinner guests
included lawmakers; county execu-
As he won settlements from a more
amenable Freeport, Melius also
strengthened his bond with Mangano,
then the incoming county executive.
Mangano is awaiting trial on federal
corruption charges in a case unrelated to Water Works.
Melius had supported Nassau Executive Suozzi’s re-election campaign, but
nine days after the Nov. 3, 2009, election, amid a recount and mounting
indications that Mangano had won an
upset, Melius gave him a $2,500 donation. Suozzi conceded on Dec. 1.
During his first term, Melius, his
wife, Pamela, and Bellando would
donate a combined $17,900 to
Mangano.
Today, Melius and Mangano are
friends. They’ve traveled to New Jersey
together to shop for dachshund puppies and to Las Vegas to gamble.
Mangano has been a frequent guest at
Oheka, appearing not only at regular
private cigar parties, but also as an
honored guest at large functions.
“I love him,” Melius has said of
Mangano. “I think he’s the best political guy.”
With Mangano in office, Melius
reaped rewards.
The day superstorm Sandy struck in
2012, for instance, the county awarded a
$655,000 emergency debris cleanup
contract to a Melius design and construction firm, ArchCon. The contract
was among several awarded without
bidding for debris removal. Available
Nassau records show no previous
county payments to ArchCon for debris
cleanup or anything else. In an interview a few years later, Melius said,
“Everything was done above board.”
In 2010, nine months into
Mangano’s term, the county settled
its portion of the Water Works lawsuit — in which Melius accused Nassau of having conspired with Glacken
to wrest the property from him — for
half a million dollars.
Asked at the time to explain the
decision, the county declined.
Varying appraisals
Meanwhile, with the two settlements won, Melius renewed efforts to
develop Water Works, proposing a
complex that violated village zoning
in multiple ways.
His plan called for a six-story,
140-unit apartment building and
quickly drew fire. Under pressure
The Water Works site in March 1998.
two new appraisals.
By then, Long Island property values
had crashed under the weight of a
historic economic slump. Nonetheless,
the appraisals valued the property at
$6.3 million and $6.9 million — more
than double the higher estimate from
five years earlier.
During the same time period, the
median value of condos and co-ops in
Freeport had dropped 24 percent, from
$420,000 to $318,000, according to the
real estate data firm Zillow. Countywide, the decline was 21 percent.
Neither the appraiser who arrived
at the $6.3 million figure nor the
appraiser who produced the $6.9
million figure responded to multiple
interview requests.
In April 2012, when the county
assessor’s office last estimated market
value for the property was $2.1 mil-
The deal gets done
In September 2012, Nassau paid
$6.2 million for Water Works. Of that,
$3.2 million went to Melius and $2.6
million to his mortgage lenders. Another $400,000 covered taxes owed
on the property. For Melius, the burden was lifted.
Twenty-one days after legislators
voted for the sale, Melius’ wife made
a $1,500 contribution to Denenberg.
In the five years before the Water
Works vote, Melius had given him
$1,950; in the year after, Melius and
his wife donated an additional $1,800.
In an interview, Denenberg, an
attorney disbarred in 2015 after pleading guilty to stealing $2 million from
a client, defended the purchase, calling it an important piece of property
for Freeport residents.
Nonetheless, he acknowledged, the
$6.2 million price tag seemed inflated.
“I had always thought that the price
was less than half of that,” he said.
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
traction. Nassau should buy the property with money set aside to preserve
undeveloped land, he argued.
Denenberg had suggested this
before and had the site placed on the
county’s list of potential acquisitions
in 2006. It was situated along the
South Shore, where open land is
scarce, and bordered a nature preserve that Denenberg said he wanted
to protect from development.
In 2006, the deal stalled over
money. Two appraisers hired by
Nassau pegged its value at $1.6 million and $2.7 million. An offer of $3
million was discussed, Denenberg
said, but it wasn’t enough for Melius.
In a court filing a few years later he
said that he had once had a deal to
sell the property for $8.5 million, but
that it fell apart.
In 2011, the Mangano administration turned its attention to buying the
property for open space and ordered
newsday.com
from residents and environmentalists,
Melius dropped the number of units
to 121, a figure still almost 50 percent
above what was allowed.
Dozens of angry residents attended
village Landmarks Commission hearings. “I don’t need a gigantic monstrosity like that in my neighborhood,” one
said. Another described the proposed
plans as “scary . . . like looking at a big
box store on Sunrise Highway.”
Only a handful of residents spoke
in favor. Melius’ attorney wrote a
letter threatening to sue the commission. “This is an attempt at intimidation!” one member of the board
seethed in an email to her colleagues.
But the final vote was 4 to 4, which
under board rules kept the plan alive.
Before the development approval
process could proceed, however, an
alternative proposal from then-Nassau Legis. David Denenberg, who
represented parts of Freeport, gained
NEWSDAY INVESTIGATION
NEWSDAY / BILL DAVIS
B35
lion, the Mangano administration and
Melius drew up a sale contract for
$6.2 million.
Explaining the price increase to
county legislators the following
month, the acting director of the
Nassau Office of Real Estate Services,
Michael Kelly, said that “time has
gone on” and that Melius had obtained additional approvals to develop the property, “which, of course,
raises the value.”
Both sets of appraisals assumed the
owner would turn the property into a
large residential complex with 121 units.
Melius didn’t have approval to build
any units, however, and under
Freeport’s density rules the complex he
proposed could contain at most 78.
Freeport’s superintendent of buildings had repeatedly rejected Melius’
permit applications in 2011, noting the
many ways his plans didn’t comply
with Freeport law.
The proposed apartment building
didn’t provide enough parking, the
superintendent wrote; it would take up
too much of the parcel; and buildings
taller than five stories were illegal.
“We’re getting a phenomenal deal,”
Kelly, who did not return calls seeking comment, told county legislators.
They approved the sale unanimously
two weeks later. Two days after the
vote, Melius’ wife, Pamela, donated
$3,500 to Mangano.
The Nassau Interim Finance Authority, which monitors the county’s
spending, was less sure the deal made
sense. Its board voted 2 to 2 — a tie
that let the sale proceed. However,
even the two members who voted in
favor questioned the price.
“There’s a lot not to like about this
transaction,” said one of them, Chris
Wright, “whether it’s the political
motivation, the timing or the value.”
Nonetheless, Wright said, the use
of long-term debt to finance the
purchase was sensible, as was using
money dedicated for open-space
preservation.
NEWSDAY INVESTIGATION
B36
CHAPTER 6
A
POLITICALLY
MOTIVATED
ARREST ON A
PUBLIC BUS
BY WILL VAN SANT
will.vansant@newsday.com
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
A
sergeant and two plainclothes
detectives from the Nassau
County Police Department
stopped a bus in Hempstead Village
on an October evening in 2013 and
arrested Randy White as he was
traveling to visit his nieces.
White’s apprehension and the
incarceration that followed came days
after he had given critical courtroom
testimony against Andrew Hardwick,
an ally of Gary Melius, that threatened to upend the Oheka Castle
owner’s effort to sway the pending
Nassau County executive race.
White’s testimony so troubled
Melius that he telephoned Nassau
Police Commissioner Thomas Dale, a
friend whom Melius had recommended for the job, to say that Hardwick’s county executive campaign
“wanted to file a perjury charge
against” the 29-year-old White, according to findings District Attorney
Kathleen Rice issued after her office
investigated the case.
When Dale’s officers could not find
evidence of perjury, they found another justification for apprehending
White: an outstanding warrant — one
not even entered in the department’s
computer system, according to a
sergeant involved — issued for
White’s failure to pay a fine in a mis-
demeanor case involving bootleg
DVD sales.
Following Melius’ call, police
jumped White’s open warrant ahead
of 50,000 others. Half were arrest
warrants, which involve criminal
violations and are supposed to be the
department’s priority. Roughly 2,000
were felony warrants. White’s warrant was a bench warrant, typically
issued for noncriminal violations like
failure to pay traffic tickets. At the
time, there were 25,000 open bench
warrants in Nassau.
Hardwick was then a long-shot,
third-party candidate for Nassau
executive. Victory was unlikely, but
his fledgling campaign had the potential to draw votes away from the
Democratic challenger to Republican
Nassau Executive Edward Mangano, a
Melius friend and ally.
The political motivation for
White’s arrest became all the more
apparent when the sergeant served
him with a civil subpoena from Hardwick’s attorney while White was in
police custody. The campaign of
Hardwick, a former Freeport mayor,
wanted White back in court to re-examine him. Earlier he had testified
that he’d been paid by the signature
when collecting petitions for Hardwick, a violation of state election law
that could endanger a campaign.
In targeting White, who has a learning disability, Melius acted not
against another player in the bruising
arena of Long Island politics, but a
vulnerable civilian whose sworn
court testimony had created a political obstacle. Top Nassau law enforcement leaders, some with personal ties
to Melius, led the arrest effort.
Rice’s investigation determined
that the incident, while troubling, did
not include criminal misconduct
warranting prosecution or involve
Mangano or those in his administration. Newsday, however, has discovered unreported information that
raises new questions about the scandal.
Key police officials at the center of
the White matter told Newsday they
were interviewed not by Rice’s investigators but by Nassau police internal
affairs personnel. They include Dale’s
chief of detectives, John Capece, who
helped lead the effort to apprehend
White. Interviews given to internal
affairs investigators are generally
criminally inadmissible, meaning
Rice’s inquiry was conducted in a
way that complicated or even precluded potential prosecutions.
In an interview, Capece told Newsday that he cautioned Dale against
arresting White. But Capece said the
police commissioner confided that he
had no choice, saying that “he was
getting pressure from people across
the street.” Mangano’s office was
across from police headquarters, and
Capece said he understood Dale to be
referring to the county executive, a
Melius ally and the potential beneficiary of the election scheme, and his
deputy, Rob Walker.
Dale, Mangano and Walker declined interview requests. They were
among several pivotal figures in the
White drama who chose not to answer questions from Newsday.
While the scandal led to Dale’s
resignation and Capece’s decision to
retire rather than be demoted, Melius
and many public officials who abetted
White’s arrest paid no price, unlike
Nassau taxpayers. White, whose
father said his son was left “psychologically bent” by the episode,
brought a lawsuit against Nassau that
alleged an array of civil rights violations and collected a $295,000 legal
settlement in 2016.
Bennett Gershman, a Pace Law
School professor and former public
B37
NEWSDAY INVESTIGATION
HOWARD SCHNAPP
A politically motivated arrest on a public bus
Independence Party ties
leader. MacKay named Melius his
“chief adviser” that year in an effort
to take the party national. The designation elevated him in a party whose
modest size belies its clout, particularly in judicial races, and that’s described by some in state politics as an
elaborate con.
In part, that’s because new voters
have mistakenly registered as Independence Party members when they
intended to register as independent
of any party.
“They don’t stand for a thing,” GOP
gubernatorial candidate Rob Astorino
said of the party’s leadership during
his failed 2014 run, “other than jobs
for themselves.”
Astorino was expressing a frequent criticism, that the party is
effectively a mechanism to exert
influence and generate income for
its leaders, rather than a standardbearer for any political ideology. It’s
Randy White in December 2013,
months after his arrest in Hempstead.
a criticism party leaders reject, but
one voiced by editorial boards and
good-government advocates across
the state.
At the time of the 2013 election,
Oheka Castle had become the party’s
de facto operations hub, a place to hold
fundraisers and interview candidates.
MacKay had named Richard Bellando,
Melius’ employee, friend and former
son-in-law, as the party leader in Nassau. And Oheka had put MacKay on its
payroll in various positions.
MacKay declined to be interviewed
for this story.
Spoiler candidates
The hand of the Independence
Party was evident in two aborted
CONTINUES on B38
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
The White scandal sprang from
machinations to keep Mangano in
office.
In 2009, Mangano won an upset
victory over Nassau Executive
Thomas Suozzi by 386 votes out of
nearly a quarter-million cast. Plans
were made to prevent any such scare
in the 2013 rematch. They involved
using third-party spoiler candidates
to siphon away the votes of environmentalists and African-Americans
who would be likely to support
Suozzi, a Democrat.
Melius and his wife, Pamela, had
donated nearly $18,000 to Mangano
during his first term, and Melius had
reason to want him re-elected. With
Mangano in office, Nassau had inked
a real estate deal, legal settlement and
contract with Melius worth more
than $7 million to the castle owner.
The county also tweaked its rules on
the use of ignition interlock devices
that combat drunken driving, benefiting a company in which Melius had a
stake.
Backing Mangano in 2013 after
having supported Suozzi in 2009 was
the Independence Party, a controversial third party with which Melius
and his beloved Oheka Castle had
become deeply enmeshed.
In 2008, Melius established an
alliance with Frank MacKay, the
party’s state and Suffolk County
newsday.com
corruption prosecutor, expressed
dismay not only at the actions of
Melius and Nassau police, but also at
the failure to pursue criminal charges
in “a case of rank corruption.”
“You’ve got this power broker who
picks up the phone to the chief of
police and gets a man yanked off a
bus and arrested,” Gershman said.
“It’s terrifying.”
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
Invalid signatures
The Independence Party’s attorney
was involved in the second effort,
which featured Hardwick, who tried
to run as a candidate for the new “We
Count” Party.
After a tumultuous term as
Freeport mayor — during which he
backed $4.4 million in settlements for
Melius in cases involving his troubled
Water Works property — Hardwick
had lost a re-election bid.
Hardwick’s party was a creation of
Melius and his allies. Between July
2013 and the November election,
records show Melius, his family and
one of his businesses gave We Count
$38,839, more than 80 percent of the
party’s total.
Because Hardwick is black, many
people in Nassau politics saw his
candidacy as an effort to siphon
African-American votes from Suozzi.
The candidate, however, insisted that
his run was a stand for the middle
class and against corruption.
“People are sick and tired of the
same old lies and deceit,” Hardwick
said in a campaign video.
After Nassau Democrats challenged
HOWARD SCHNAPP
Hardwick’s petitions in state court,
state Supreme Court Justice F. Dana
Winslow barred him from the ballot,
declaring that his petition effort had
been “permeated with fraudulent
practices” of which Hardwick had
“knowledge.”
While the case was in court that
October, the board of elections found
2,700 of Hardwick’s 8,400 nominating
signatures invalid. It was suspected
that thousands more were outright
forgeries, but Winslow, with the
consent of both parties, ceased his
review after identifying more than
100 such bogus signatures.
Asked to identify his largest campaign donor, Hardwick replied under
oath, “I don’t know.”
At the time Hardwick testified,
Melius was his sole donor. His campaign treasurer was an Oheka employee, and a campaign worker testified that she had delivered nominating petitions to Hardwick at Oheka.
Independence Party attorney Vincent
Messina, whose firm collected
$16,000 from We Count’s largely
Melius-funded treasury, represented
Hardwick in court.
Hardwick declined interview requests.
Nassau County Executive Edward Mangano with Nassau Police Commissioner
Thomas Dale in January 2013. Dale resigned at the end of the year.
A call to the commissioner
Randy White emerged as a key
witness in the Hardwick case.
As a teenager, White had compiled
a criminal record, including convictions for attempted robbery and
felony drug possession. Through his
20s, however, White stayed out of
legal trouble, save for an occasional
misdemeanor violation for selling
bootleg DVDs.
He lived at home with his father,
Rassan Hoskins, a Nassau Democratic
Party committeeman, and struggled
to find work. When Hardwick operatives asked White to collect signatures to get Hardwick on the ballot,
White agreed.
“Randy naturally wanted to make
some money,” Hoskins said. “But I
told Randy, ‘Man, you can’t work for
Hardwick, I am a Democrat.’ ”
Hoskins said his son “is not sophisticated enough” to always recognize
when he’s being used and can be
truthful even when doing so could
cause him grief. Under questioning in
the Hardwick case, White testified
that he’d been paid by the signature,
which is prohibited by state election
law in part because it’s thought to
incentivize fraud.
Two days later, on Oct. 4, Hardwick’s attorney Messina unsuccessfully attempted to introduce a telephone call recorded by campaign
operatives in which it was alleged
White contradicted his damaging
testimony.
Within hours, according to findings
that District Attorney Rice released
six weeks later, Melius called Nassau
Police Commissioner Thomas Dale,
whom he had recommended
Mangano appoint, and said Hard-
NEWSDAY / CHRIS WARE
efforts to use third-party candidates
to strip votes from Suozzi and to aid
Mangano’s re-election.
The first involved 25-year-old
Phillipp Negron, who was recruited
to run for executive on the Green
Party line and had landed a public
works job with the Mangano administration just days before his campaign
became public. Negron would testify
in an election law case involving his
campaign that he decided to run after
speaking with his stepfather, Timothy
Williams, a Mangano appointee and
chairman of the Nassau Industrial
Development Agency. After the talk,
he said, a woman brought a Green
Party registration form to his home.
Negron testified that he and his
stepfather next met a man at a diner
who brought paperwork to sign.
“When I registered to be a Green
Party member, I expressed my interest in running,” Negron said. “Next
thing I know, I’ve been nominated.”
The man he and his stepfather met
at the diner was Brian Nevin,
Mangano’s former chief spokesman
and manager of his re-election campaign, Negron testified. The bulk of
the petition signatures Negron
needed to get on the ballot would be
collected by Nevin and other Republicans working for Mangano, court
records would establish.
Robert Pilnick, an Independence
Party officer, was also among the
handful of political operators who
collected signatures, county election
records show.
Democrats challenged Negron’s
petitions in court, alleging that the
campaign was a “fraud” and that
some signatures were from reluctant
Oheka Castle employees. After two
days of testimony, Negron withdrew
from the race.
NASSAU COUNTY GOVERNMENT
NEWSDAY INVESTIGATION
B38
Chuck Ribando in December 2014.
Andrew Hardwick in July 2012.
wick’s campaign “wanted to file a
perjury charge against” White.
Dale sent some of his top people, a
department attorney and Capece, the
chief of detectives, to the First
Precinct in Baldwin, according to the
Rice findings. There they met with
Hardwick campaign operatives and
Messina, the candidate’s attorney
who also represented the Independence Party, to discuss the perjury
charge. The recorded phone call
turned out to be inaudible, Capece
said in an interview, and he told Dale
that he would not arrest White for
perjury.
Police soon found other grounds,
however.
Sal Mistretta, then an Oheka regular and a Nassau police sergeant who
led the pistol license division, played
a central role in the scandal. At the
time, Mistretta was backing
Mangano’s re-election. He gave $500
to the incumbent on Oct. 18 and was
listed as a contact on a flyer for an
Oct. 28 Mangano fundraiser.
In a recent interview, Mistretta said
that he checked the department’s
electronic warrant system on the day
of the First Precinct meeting and
found no hits for White. Nonetheless,
he said, an outstanding warrant was
located, presumably in court filings,
and faxed to the precinct after 5 p.m.
The warrant involved White’s
failure to pay a $175 misdemeanor
fine, $25 victim assistance fee and $50
DNA databank fee levied in a bootleg
DVD case in which White was sentenced to 14 hours of community
service after he pleaded guilty. All
guilty verdicts in New York State
require the levying of such fees.
The warrant had been issued on
Aug. 26, almost six weeks before the
meeting at the First Precinct, and
until that moment it had apparently
not been an urgent matter. Between
the day it was issued and the First
Precinct meeting, White had appeared in court several times and
spent 10 days in jail on another DVD
case, but he had not been picked up
on the warrant.
When news of the warrant reached
Dale, he ordered White located and
arrested, despite what Capece said
were his cautions to the commissioner.
Using information from an individual Dale would later describe to
investigators as a “confidential
source” who appears to have tracked
White, he was located the following
evening. A sergeant and two detec-
B39
at more than 480,000 statewide, according to the state. That’s because
many people have registered as Independence Party voters mistakenly,
The New York State Independence
actually intending to register as indepenParty was the creation of three
dent of any party, critics contend.
Rochester-area political mavericks,
“The name of the Independence
including Thomas Golisano, a billionaire
Party is misleading: it neither represents
businessman and philanthropist who
‘independence’ nor is it ‘independent’ of
ran unsuccessfully for governor three
the major parties,” Susan Lerner, directimes, Newsday stories at the time
tor of the good-government group
show.
Common Cause New York, wrote in an
The party, according to the stories,
email.
first appeared on the ballot in 1994 and
Though some candidates have pubwas envisioned as a home for disillulicly questioned or even condemned the
sioned centrists who no longer felt
party’s influence on state politics and
welcome in either the Republican or
rejected its backing, others prize its line
Democratic parties.
on Election Day. The state’s arcane
Today’s Independence Party has a
fusion system allows candidates to pool
similar self-conception. According to its
vote tallies when they run on more than
website, the party “seeks to foster
one line. Party support in tight races and
balanced, pragmatic leadership and an
judicial elections can provide the winend to partisan stagnation.”
ning margin.
Though supporters still portray the
Take the 2012 Supreme Court races
party as a nonideological alternative to a
on Long Island. Twelve candidates ran,
failed two-party system, prominent
with the top six vote-getters winning a
editorial boards and high-ranking politijudgeship. The six winners all had Indecal leaders across the state have dependence Party support; the six losers
scribed it today as devoid of conviction
did not. Party support more than covand chiefly concerned with serving the
ered the difference between
interests of its leaders.
the sixth-place victor and
Frank MacKay, who leads
seventh-place loser.
the Suffolk County IndepenRepublicans in the State
dence Party, emerged as the
Senate in particular enjoy a
state party leader in 2000
close alliance with the Indefollowing courtroom battles
pendence Party. In 2013, the
and an intraparty feud.
Moreland Commission,
MacKay established himself
which Gov. Andrew M.
as a savvy electioneer, strikCuomo convened to study
ing deals with major party
public corruption but discandidates eager for Indepen- Frank MacKay
banded after less than a year,
dence Party backing.
revealed that $350,000 from the houseMacKay tapped Gary Melius as his
keeping account of the Senate GOP had
chief adviser in 2008 for an effort to
been transferred to the housekeeping
take the party national, and Oheka
account of the Independence Party.
Castle has served as an operations hub
By law, housekeeping money is
for the Independence Party.
supposed to be used only to cover party
MacKay has earned income as an
Oheka employee. On financial disclosure expenses like maintaining a headquarters and paying staff, not to support
forms, which ask for reported income in
candidates. However, the money transbroad ranges, MacKay listed earnings
ferred from the Senate GOP to the
from “Oheka Castle Catering, Inc.” of
Independence Party was used to pay for
between $345,000 and $525,000 from
attack ads against Democratic candi2012 to 2016. During the same period,
dates.
MacKay reported he collected income
While Senate Republicans have
of between $315,000 and $510,000
benefited from Independence support,
from the state and Suffolk IndepenIndependence officials have also coldence parties.
lected salaries from GOP elected offiMoney flows in the other direction,
cials. Among them are Tom Connolly,
too. Expenditure reports show that the
the Independence Party’s vice chairparty’s Chairman’s Club and Nassau
man, and Bellando, the party’s Nassau
Club have paid nearly $250,000 to
chair and Melius’ former son-in-law.
Melius; his businesses; his former sonConnolly was paid $88,691 in 2017 as
in-law, Richard Bellando, who works at
director of operations for state Sen. Phil
Oheka Castle and is the party’s Nassau
leader; and to two nonprofits that Melius Boyle (R-Bay Shore). Bellando collected
$30,762 last year as a legislative aide for
controls.
the Senate GOP majority operations
Critics have labeled as misleading the
office.
party’s enrollment figure, which stands
BY WILL VAN SANT
Nassau Police chief of detectives
John Capece in April 2008.
know if the police think I got Andrew kicked off the ballot.”
Link to prosecutor’s office
CONTINUES on B40
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
Rice, who is now a congresswoman, began her investigation
shortly after details of White’s arrest became public and would convey her findings to Mangano by
letter, assuring the county executive
that it was “appropriate to note our
investigation has uncovered nothing
to suggest that you or members of
your administration were involved
in the case against Mr. White.”
Chuck Ribando, Rice’s chief public corruption investigator whom
Mangano would hire the following
year as his deputy for public safety,
helped lead the White inquiry.
By Melius’ own account, Ribando
had been a frequent guest at Oheka
and the two men enjoyed a friendship that went back years.
In 2009, Freeport Village Attorney
Howard Colton alleged that Melius
was using Ribando to bully him.
Melius was engaged in an effort that
eventually succeeded to settle a
lawsuit he’d brought against the
newsday.com
tives handcuffed White on the public bus and took him to the First
Precinct, where he was given a strip
and cavity search, according to his
federal civil rights complaint.
White was then taken to police
headquarters, where Mistretta
served him a civil subpoena drafted
by Messina, the Independence
Party’s attorney, who was representing Hardwick.
The subpoena ordered White to
appear in court the following Monday so that he could be questioned
about his prior testimony. Mistretta
said he’d been given the subpoena
by Brandon Irizarry, who worked on
the Mangano and Hardwick campaigns. Though not a police officer,
Irizarry mixed regularly with Melius
and his many law enforcement
guests at Oheka. Mistretta would
later insist that he did not know that
what he’d passed along was a subpoena.
Police next took White to the
county jail, where, his federal complaint states, he was again subject to
strip and cavity search. A judge
released him the next day.
In comments to Newsday shortly
after he left jail, White said he felt
fearful and perhaps a bit paranoid.
“It’s got me scared to go outside my
house,” he said, “because I don’t
HOWARD SCHNAPP
NEWSDAY / ROBERT MECEA
will.vansant@newsday.com
NEWSDAY INVESTIGATION
Independence Party’s
road to prominence
village involving his Water Works
property.
Colton went to village police to
complain that Melius had corrupted
the district attorney’s office and was
using Ribando and the threat of getting Colton indicted to secure a settlement. At one point, Colton told police, he met and was questioned by
Ribando after Melius told him to seek
out the investigator before the district
attorney’s office came to “get” him.
Ribando declined repeated requests for comment.
In 2012, when Ribando’s daughter’s
wedding reception took place at
Oheka, an overnight affair that saw all
rooms booked, Melius said in an
interview that he had charged a discount and suggested that may have
been because he’d been unable to line
up any other event for the date in
question. Mistretta and others who
frequented Oheka said Ribando regularly attended the cigar parties Melius
held at the castle and enjoyed Johnnie
Walker Blue Label Scotch.
On Election Day in November 2013,
as the Rice inquiry was underway,
Melius sent Ribando a get-out-thevote email that Newsday obtained
through a records request. “Just a
reminder to vote today,” Melius
wrote. “Please consider voting Row E,
the Independence Line — where you
will find the best of all parties.” A
November 2013 ballot showed
Mangano and Rice were among
dozens of candidates featured on the
Independence Line.
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
Internal affairs involvement
Rice’s letter announcing the results
of the inquiry was released on Dec.
12, 2013. She concluded there was no
evidence of criminal misconduct by
police brass.
While the case had “obvious political
overtones” and Dale’s decision to involve himself was “a judgment potentially fraught with peril,” Rice found
that “the department’s decision to
target the subject of an open warrant
was not a violation of criminal law.”
However, Rice noted that her office
would continue to investigate White’s
having been served with a civil subpoena by the Hardwick campaign
while he was in police custody, which
she called “a deeply troubling aspect
of this case.”
“My office conducted a thorough
investigation into these serious allegations,” she wrote.
Yet Mistretta and Capece, two
lawmen central to the scandal, said in
interviews that Rice’s investigators
never spoke to them. Mistretta was
the sergeant who delivered the Hardwick campaign’s subpoena to White
while he was in police custody — the
aspect of the case that Rice described
as “deeply troubling” and “still under
investigation by this office.” Capece,
the former chief of detectives, had
helped to carry out Dale’s arrest
order. Mistretta said he knew of no
others involved who were inter-
after his client’s arrest that pointed
out tens of thousands of warrants
were then open.
NEWSDAY / J. CONRAD WILLIAMS JR.
NEWSDAY INVESTIGATION
B40
viewed by the district attorney’s
investigators.
After being told that Mistretta and
Capece said they never spoke to any
investigator from her office, Rice’s
spokesman Coleman Lamb said by
email that in fact the Nassau police
Internal Affairs Unit had “conducted
this investigation” with “oversight”
from the district attorney’s office.
Though Lamb said that was “standard” practice in such cases, the
approach would require extraordinary steps to preserve prosecutors’
ability to bring criminal charges.
That’s because internal affairs units
focus on violations of department
rules and their investigators can use
the threat of workplace sanction to
compel interviews. Prosecutors,
however, must honor the rights of
individuals not to incriminate themselves and may not use such interviews to bring criminal charges.
In her letter, Rice, who declined to
be interviewed for this story, stated
that her office had reviewed “compelled departmental interviews” as
part of its “consideration of potential
criminal charges.”
“She should not have received any
compelled interviews,” said Jeff
Noble, a former Irvine, California,
deputy police chief and now a law
enforcement consultant who has
written extensively on the issue of
cooperation between prosecutors and
Internal Affairs Unit investigators.
“She could not use those interviews
in any prosecution and the receipt of
the interviews may have tainted her
office from being able to conduct an
investigation if there was independent evidence of a crime.”
Any valid criminal investigation, he
said, would have required Rice to
Randy White in August 2014.
establish a “clean team” of prosecutors, none of whose members had
seen the compelled interviews.
Asked how Rice expected to investigate potential crimes using internal
affairs investigators, Lamb wrote
“that’s a more detailed question than
we can handle without having access
to case files, notes and personnel at
the DA’s Office.”
Lamb referred a reporter to the office
of District Attorney Madeline Singas,
who succeeded Rice in 2015. A
spokesman for Singas recently declined
to provide details of the investigation.
In response to a public records
request Newsday made to the district
attorney’s office, Singas provided
portions of the White case file in
early 2017, withholding some portions
so as not “to reveal confidential information relating to a criminal investigation” and to avoid “unwarranted
invasion of personal privacy.”
Newsday received White’s fivepage notice of claim against the
county in the civil lawsuit that resulted in his $295,000 settlement, 50
pages of related case law research
and news stories, Rice’s letter of
December 2013 and a two-sentence
“final agency determination” from
2015 that found White’s in-custody
subpoena service did not “warrant a
criminal prosecution.” Newsday has
asked Singas’ office how it was able to
close that investigation without having interviewed Mistretta, the man
who delivered the subpoena, but has
gotten no answer.
The only other record the office
provided in response to the records
request was an email from White’s
attorney to a prosecutor sent shortly
Commissioner, chief of detectives out
On Dec. 9, 2013, three days before
Rice issued her letter, Dale contacted
Capece while he was vacationing in
Florida and told him he had to come
back to Long Island to be interviewed
by internal affairs, Capece said. At the
time, Dale was himself presumably a
focus for investigators.
Capece said Dale told him not to
worry because “directly from Kathleen Rice” he’d gotten everything
“smoothed out” in regard to her soonto-be-released letter.
Rice’s spokesman Lamb denied that
such a conversation with Dale took
place. “Is there any evidence at all to
suggest it did,” Lamb wrote, “other
than Mr. Capece claiming that he
heard it second hand from Mr. Dale?”
The day Rice produced her letter,
Dale resigned, under pressure from
Mangano.
In an interview the following year,
Melius called Dale’s ouster “the worst
thing in my life.”
“It was worse than getting shot for
me,” he said, adding that despite
Justice Winslow’s decision to the
contrary, he believed White had
“perjured himself.”
The same day the Rice letter was
released, Capece said, Mangano called
him on speakerphone, saying he had
“tragic news.” Mangano told him that
he was at fault for the White debacle,
Capece said, and that he had a choice:
retire or be demoted to sergeant.
When Capece responded by saying
he needed time to make such a decision, he said, Mangano deputy Rob
Walker told him, “You have 15 minutes to make up your mind.” Walker
also demanded to know whether he
knew that he was obligated to refuse
when asked to make an illegal arrest,
Capece said.
He chose to leave the department.
“I don’t want to work for these
people,” Capece said he remembers
thinking.
The failure to bring criminal
charges angered Nassau Democratic
Party leader Jay Jacobs, who once
backed Hardwick in a Freeport mayoral race and recruited Rice to run for
district attorney in 2004. Jacobs said
he was dismayed by Rice’s decision
and aghast at the White affair, calling
it “blatant witness intimidation.”
Jacobs is not alone in characterizing the episode as criminal. Gershman, the Pace Law School professor
and former public corruption prosecutor, reviewed news reports that detailed the episode and said if the case
had arrived on his desk, he’d have
immediately empaneled a grand jury.
“This is just so outrageous,” Gershman said. “Do you have a conspiracy
to violate White’s civil rights? Of
course you do. Do you have official
corruption? Of course you do. You
have a lot of crimes here.”
B41
PATRICK E. MCCARTHY
NEWSDAY INVESTIGATION
Nassau County District Attorney Kathleen Rice, seen in June 2010, began an investigation shortly after details of Randy White’s arrest became public.
Melius emails District Attorney Rice
BY WILL VAN SANT
AND PAUL LAROCCO
will.vansant@newsday.com
paul.larocco@newsday.com
NEWSDAY COM/PATHWAYTOPOWER
●
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
into the Randy White case.
In a brief interview last August, Melius
expressed bitterness at Rice for rejecting their association after having, he
said, visited Oheka more than once with
what he called “her little rat dog Pearl to
eat, drink and be merry, ask me for
favors, ask me for money.”
Lamb disputed Melius’ characterization of Rice and offered what he called
“photographic evidence” that Pearl is a
“lovely animal who looks nothing like a
rat.”
In a December 2009 email, Melius
told Rice that Anthony Marano, Nassau’s top judge, wanted to meet her for
lunch at Oheka Castle. In the same
email, Melius told Rice that Independence Party leader Frank MacKay was
eager to set up a dinner.
Lamb wrote that he could not say
whether the meetings with Marano or
MacKay took place, but that Rice had
lines of communication with both men
newsday.com
In emails Gary Melius sent to Kathleen Rice, then the Nassau County
district attorney, from December 2009
through June 2013, he tried to arrange
play dates for their dogs and sought to
set up meetings between her and
judges.
The nine emails, provided to Newsday in response to a public records
request to current District Attorney
Madeline Singas’ office, show a cheery
Melius, who with his wife and an employee donated $13,300 to Rice’s political campaigns, also passing along the
resume of a friend’s son, whom Rice
hired.
Though the emails suggest a friendly
relationship, Rice’s spokesman, Coleman Lamb, said by email that the two
were never personally close. “Kathleen
never accepted, let alone asked for,
favors of any kind from Mr. Melius,”
Lamb wrote.
The district attorney’s office, in fulfilling Newsday’s records request, found
no email responses from Rice to Melius.
Lamb wrote that Rice cut off contact
with Melius and stopped taking his
donations before the Randy White
investigation, which began in late 2013.
Asked why Rice did so, Lamb wrote that
she made the decision in conjunction
with the district attorney’s office, but
that he was “not privy to the reasoning.”
Today, Melius faults Rice for being
thankless.
In April, he said Rice alone among
local politicians distanced herself
from him after the 2014 attempt on
his life. Rice didn’t seek Independence Party support in her successful run for Congress that year, publicly citing her office’s investigation
that were independent of Melius, as
would be expected given their roles in
the judiciary and politics.
In a March 2012 email, Melius suggested that his Labrador retriever, Otto,
and Pearl, Rice’s half-Maltese half-Yorkie,
needed to get together. “Otto has been
asking for Pearl,” he wrote, “so hopefully
we can set up a play date again.”
In the same email, Melius included
the resume of a Bronx prosecutor
whom Rice later hired to work in her
public corruption bureau. Rice has
denied that Melius played any role in
hiring the prosecutor, who no longer
works in Nassau.
“I was wondering if you could spare a
little time for lunch or dinner with an old
friend,” Melius wrote in a June 2013
email. “How’s Pearl – Otto has been
asking for her.” Nine days later, Melius
wrote asking whether Rice wanted
Thomas Adams, Nassau’s top judge, to
join them for a July 9 lunch. The proposed lunch did not take place, Lamb
wrote.
The White scandal would explode
four months later.
NEWSDAY INVESTIGATION
B42
CHAPTER 7
WITH NEW
PLAYERS,
WILL LI’S
ENTRENCHED
SYSTEM
SURVIVE?
BY SANDRA PEDDIE
sandra.peddie@newsday.com
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
O
heka Castle’s grand ballroom
has been home to decades of
fundraisers, weddings and
parties for Long Island’s elite. In a
small, linen-white dining room
nearby, intimate networking lunches
hosted by the influential Independence Party have drawn a steady
stream of judges and law clerks.
Down in the basement is what the
castle’s proud proprietor, Gary
Melius, calls his “man cave,” where
some of the Island’s most powerful
figures have smoked cigars and
traded stories.
The castle has stood unrivaled as
an expression of power on Long
Island, and its bonding rituals provide
a blueprint of how local influence
operates, bearing fruit for Melius, his
allies and many others. Whatever it
costs the public, for those in power
the system works.
The grand tour
Melius nearly lost his life in the
shadow of his greatest success.
From the day he bought the abandoned castle, in 1984, Melius dedicated himself to restoring Oheka. He
sold it in 1988 for $22.5 million to a
Japanese billionaire accused of negligence in a hotel fire that killed 33
people, and years later bought it back
from the businessman’s family for a
third of that recorded price.
He was cited for ignoring fire
safety and zoning laws and fought his
neighbors, but after an aggressive
political and public relations campaign, he won approval from Huntington officials he had supported to
operate the castle as a commercial
enterprise. Over the years, he said, he
had invested millions renovating the
castle, trying to recapture its original
look.
He transformed what was then a
127-room mansion into an exclusive
setting for lavish wedding receptions,
the home of a high-end restaurant
and boutique hotel, and a mingling
ground for Long Island’s political, law
enforcement and judicial elite.
A night at the hotel can cost more
than $1,000, a catered event tens of
thousands — up to $500 a head, in
addition to a rental fee of up to
$12,000. Restaurant guests can sample
appetizers like lobster meatballs for
$20 or steak entrees for up to $55.
The curious can book tours, with
prices ranging from $15 to $100, according to Oheka’s website.
There’s a lot to see.
Start at the main entrance, where
the marble steps, wrought-iron railings of the grand staircase, and shimmering crystal chandelier offer an
expansive introduction to a mansion
where F. Scott Fitzgerald was supposed to have gotten inspiration for
Jay Gatsby’s fantasy palace in fictional West Egg, Long Island.
These days, it has been used as a
location for Taylor Swift’s 2014 “Blank
Space” video about a woman living
the Gatsby life who unleashes her
fury on a cheating beau in, of all
places, a castle parking lot.
Just outside the castle are the gardens and Great Lawn, where Melius
holds an annual Garden Party hosted
by Friends of Oheka, a nonprofit
formed to raise restoration money
and public awareness of the castle.
After buying tickets, party guests may
rent antique Gatsby-style attire and
props, like tommy guns, through an
Oheka website.
Musicologist Roger Hall, who had
lived as a student at the Eastern Military Academy when it was located at
Oheka, created a website called “Memories of Oheka.” On it, and in a subsequent interview, he described a 2004
garden party where, he said, Huntington Councilman Mark Cuthbertson
played Jay Gatsby. Cuthbertson said he
did not remember doing so.
The formal gardens, with eight
reflecting pools, three fountains and
assorted statuary, are also a popular
spot for weddings, among them those
of the singer Kevin Jonas; Anthony
B43
NEWSDAY INVESTIGATION
THE NEW YORK TIMES / JAMES ESTRIN
Withnewplayers,will LI’sentrenched systemsurvive?
of happiness.”
The insider’s tour
Angela, held their wedding reception in
the Terrace Room in 2015, documenting
the event in an elaborate video.
Chuck Ribando, former Nassau
County Executive Edward Mangano’s
deputy for public safety, held his
daughter’s wedding at Oheka when
he was chief investigator for then-Nassau District Attorney Kathleen Rice.
For at least some insiders, the
payment terms are different from
CONTINUES on B44
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
But there’s another tour of Oheka
that can be constructed, shaped by
the workings of Long Island politics.
This is a more private world of cigar
parties, man-cave gatherings, power
lunches and political and judicial candidate screenings, over which Melius has
at times presided, where local players
forge relationships and cut deals outside public view.
Politically, the result is something
in which Oheka has served less as a
backdrop than an agent.
“Politics is a perception business, and
if you can represent yourself as some-
Gary Melius plays poker with prominent
attorney Steven Schlesinger, to his right,
former U.S. Sen. Alfonse D’Amato and
others at Oheka Castle in 2007.
one who can move votes or move
money, or both, you’re powerful,” said
Jay Jacobs, the Nassau Democratic
leader with whom Melius has had a
tumultuous relationship. “Oheka is an
imposing, magnificent facility. I liken
going to Oheka Castle to in some respects going into the Oval Office.”
In this world, it’s not a wedding
involving a pop star that catches the
eye. It’s weddings of people like
Steven Schlesinger.
Schlesinger, then counsel to the
Nassau Democratic Party, married
Caryn Fink, a law clerk, there in
March 2014, filling the grand ballroom, restaurant and bar.
Assemb. Phil Ramos and his wife,
newsday.com
Weiner and Huma Abedin in a ceremony officiated by former President
Bill Clinton; and the late mob boss
John Gotti’s grandson, John Agnello,
with his proud mother, Victoria Gotti,
looking on.
The 23-foot-high Grand Ballroom, lit
by crystal and silver wall sconces,
dominates the second floor. The sleek
bar and restaurant are open to the
public, and Melius often stops in to
greet guests, on occasion showing them
just where in the head he was shot.
In the morning, guests can breakfast in the yellow Terrace Room,
added to accommodate larger events,
or stroll amid the gardens.
Oheka, Melius has said, “is a place
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
Anthony Weiner and Huma Abedin at
their Oheka Castle wedding in July 2010.
what Melius normally charges. In an
August 2014 interview, he said he
routinely gives discounts to law enforcement personnel and personal
friends, including those in politics.
He didn’t offer examples. But
Schlesinger didn’t pay for his wedding until five months later, a day
after a Newsday reporter made inquiries about judicial assignments he
and other associates of Melius had
received. He produced a $75,000
check as proof of payment.
Financial interactions involving
Melius and Schlesinger drew the
interest of the courts, where an examiner found later that there had been
no invoices for the wedding at Oheka
and that an internal worksheet listed
no money due and contained the
word “barter.”
The Friday cigar nights, at which a
strong law enforcement contingent
has mingled with the Island’s elite,
have been held in the castle’s courtyards, according to several regular
attendees. Mangano dropped in regularly with then-County Sheriff
Michael Sposato often driving. Alfonse D’Amato, the former U.S. senator who remains politically involved,
has also popped by occasionally.
Robert Hart, who headed the Long
Island FBI office and has served as a
deputy Nassau police commissioner,
has attended, as has Malcolm Smith,
once the Democratic leader of the
State Senate who was convicted on
corruption charges involving his
would-be New York City mayoral
campaign in 2013.
Sprinkled through many of the
rooms have been several decades of
fundraisers for such figures as state
Attorney General Eric T. Schneiderman, Mangano, Suffolk County Executive Steve Bellone, then-Suffolk Legis.
Lou D’Amaro, and Steve Levy, then-Suffolk County executive. In an interview,
Melius said he had hosted in-kind
fundraisers for Levy and D’Amaro,
meaning that he donated the cost of the
events to their campaigns.
Many of those closest to Melius
have often been invited to the library
for brandy and cigars. State Independence Party leader Frank MacKay,
who has posted Oheka photos on his
Facebook page, has been one.
Mangano has been another.
Far removed from the public tour,
past the basement bakery and laundry,
there’s what Melius calls the man cave,
which remained unfinished as the rest
of Oheka was reborn, with wooden
planks leading to a wall lined with
urinals. Melius has one rule for that
room: No women allowed — even
politicians he’s trying to cultivate.
In a March 2012 email to Rice, then
the Nassau district attorney, in which
he passed along the resume of a good
friend’s son, Melius wrote: “Hi, Kathleen, I really enjoyed the other night,
lots of laughs. Sorry I couldn’t bring
you to the man cave, wink wink —
but rules are rules.” That email and
other emails provided by the district
attorney’s office show no response
from Rice, and her office said she
made none.
The Chaplin Room, where the fuchsia walls are lined with photos and
posters of the Little Tramp, is another
special place. Although the public can
rent it for parties, it outranks even the
man cave as a home of political muscleflexing. Beyond the election night
gatherings that have drawn former
Congressmen Steve Israel and Gary
Ackerman, and other top elected officials, the truly special event is the
running poker game, where the regulars have included D’Amato,
Schlesinger and Dennis Lemke, a prominent criminal defense attorney, others
who have attended said.
The Chaplin Room also has been
used by the Independence Party to
screen candidates for office, according to Jacobs, the Nassau Democratic
chief. Oheka is the unofficial headquarters of the party, which has
drawn enough votes to sway judicial
elections in Suffolk and provides a
platform for MacKay to negotiate
complicated cross-endorsements that
can assure a candidate’s victory.
“If you’re the Independence Party,
your home court is an advantage,”
Jacobs said.
Melius has been listed as the party’s
chief adviser, and he has paid MacKay,
the party’s statewide and Suffolk
County chief, as a public relations
executive at Oheka. In 2016, MacKay
earned between $20,000 and $50,000
according to state filings that require
party leaders to list outside income in
broad ranges. In previous years, he
made between $100,000 and $150,000
annually. Oheka also employs Richard
Bellando, the party’s Nassau head and
Melius’ former son-in-law.
A dining room lined with silk murals has hosted what MacKay calls
“power networking luncheons,”
With those cross-endorsements,
Whelan won with the highest vote in
the 10th Judicial District.
By 2011, his career in full bloom,
Whelan was assigned to one of Suffolk’s
three commercial courts, where business litigation and foreclosures provide
opportunities for coveted judicial
appointments for lawyers and property
managers to oversee troubled assets.
Whelan was also a welcome guest
at Oheka and attended the castle’s
posh Super Bowl parties, Melius
recalled in an interview.
In an interview with Newsday editors last year, Melius readily acknowledged Oheka’s popularity, and his.
“Everybody comes to me,” he said. “You
know why? I deliver if I can. If I can’t, I
tell you. I don’t pay anybody off.”
Power in action
MELIUS FAMILY
BARBARA KINNEY
NEWSDAY INVESTIGATION
B44
Gary Melius in a March 2014 video,
speaking publicly for the first time
after he was shot three weeks earlier.
where he and Melius have brought
together Broadway producers, local
politicians, law clerks and judges.
Judges are prohibited from politicking, so casual gatherings with party
leaders offer an opportunity to get
known. The connections can be useful.
Nowhere is that more evident than
in the history of Thomas Whelan,
who, while Babylon Town attorney in
1988, drove across the median on the
Southern State Parkway and hit an
oncoming car, seriously injuring a
Commack man.
Whelan was charged with seconddegree assault, vehicular assault and
driving while intoxicated. He ultimately was convicted of three misdemeanors and a violation and sentenced to probation for 3 years. He
was not reappointed by the town
when his term expired.
It was a setback that could derail a
career.
But in 2000, Whelan, who is godfather to MacKay’s daughter, saw his
career resurrected after MacKay
constructed a complex cross-endorsement deal on his behalf. By agreeing
to Independence Party backing for
Democratic candidates, MacKay
persuaded the Democrats to back
Whelan for a Suffolk Supreme Court
judgeship, party leaders told Newsday
at the time. He also secured Conservative and Working Families lines.
Oheka’s power hubs intersect
freely, particularly over arcane opportunities that only political insiders
might recognize.
One involved Oheka itself, already
the beneficiary of many decisions by
the Huntington Town Board that
allowed and expanded commercial
activity in a residential neighborhood.
Many board members frequented the
castle, had become Melius’ friends
and received generous campaign
contributions from him. They credited their decisions with restoring an
architectural gem.
But those decisions paled in potential impact to one they made in 2012
permitting construction of 191 condos
on the property projected to sell for
between $1 million and $5 million.
The potential value created by their
vote could run into the hundreds of
millions of dollars.
Cuthbertson, a Democratic board
member whom other guests recall
seeing at annual garden parties at
Oheka and who received more than
$30,000 in contributions from Melius
over the years, opened the way in
2009. He sponsored a resolution
establishing cluster zoning of golf
courses — including the one next to
Oheka. Such zoning allows a developer to build more units than normally permitted in one area of the
cluster in exchange for preserving
open space in another.
Cuthbertson then sponsored the
critical 2012 zoning change to allow
191 condominium units on the property, which passed unanimously.
Oheka Castle is 109,000 square feet.
The proposed condo complex would
be 393,427 square feet.
At the time, Cuthbertson was engaged with Melius in another lucrative
public realm. They and Melius’ daughter, Kelly Melius-DiPreta, were involved in two court-appointed receiverships that earned the three a total of
$284,000 in fees and expenses.
Cuthbertson did not disclose those
ties at the time of the town board’s
vote. He said this was because his
was a “parallel” relationship in which
a judge appointed him and the
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NEWSDAY INVESTIGATION
Coveted appointment
Schlesinger, meanwhile, has reaped
rewards in another judicial sphere
and shared them with a charity created by Melius, his Oheka poker pal.
He was appointed by the Nassau
County Surrogate’s Court to manage a
foundation created by Shirley Giten-
stein of Atlantic Beach after her death
in 2007. The Kermit Gitenstein Foundation, with $11.4 million in assets, financed Jewish causes and health care.
This kind of appointment is coveted by politically connected lawyers
because foundations created by
wealthy individuals who die without
heirs need to be managed and their
funds distributed. The fees for carrying out these functions can be substantial. Records show Schlesinger
earned more than $100,000.
Schlesinger gave $250,000 of the
Gitenstein money to the Elena Melius
Foundation, named for Melius’
mother. The donation came two days
before Schlesinger’s wedding. He also
provided $50,000 of the Gitenstein
Foundation’s money to a charity
started by another Oheka poker pal,
D’Amato, who spent the money on a
water park that was built in his hometown, Island Park.
In May 2016, the newly elected
Nassau Surrogate’s Court Judge Margaret C. Reilly issued a scathing ruling and removed Schlesinger, calling
him “unfit” because he had engaged
in potential self-dealing, exceeded his
authority as receiver, and had failed
to comply with court orders.
Edward Mangano, the Nassau County
executive, with Gary Melius in 2014.
Joseph W. Ryan Jr., appointed by
the court to examine the case, found
that Schlesinger had allowed Melius
to direct where thousands of dollars
in grants from the Gitenstein Foundation should go. Reilly said that was a
conflict of interest, citing an email to
Melius from Schlesinger’s legal assistant that asked him “to list the organizations Gary Melius decided on and
the amounts requested . . . I don’t
want to miss any.”
Both the state attorney general’s
office and the Eastern District of the
U.S. attorney’s office investigated the
transactions. A spokesman for the U.S.
attorney’s office declined to comment.
In a court settlement related to the
state attorney general’s office inquiry,
Schlesinger agreed to stop taking commissions from the foundation and pay
back $150,000 he’d earned as receiver.
He was forbidden to serve on a nonprofit or charity for five years.
Schlesinger declined to be interviewed for this story. He said in a
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Whelan declared that Melius had
“the appropriate ethical character”
for the post.
Whelan’s lawyer, Clifford Robert of
Uniondale, said in a statement that
the judge, who was subsequently
transferred out of the commercial
part, had “proudly upheld the highest
standards of both the practice of law
and of the judiciary.”
Cuthbertson, who was paid $101,594
for his role in the Islandia building, said
in an interview that he had recommended Melius’ daughter as manager
for a subsequent receivership, because
he thought she was well qualified.
Altogether, Melius and friends and
allies collected more than $750,000 in
fees from four receiverships. Among
those allies were his former son-inlaw, Bellando; his lawyer, Ronald
Rosenberg, and Schlesinger, court
records show.
newsday.com
Meliuses separately, although he did
acknowledge that he had recommended Melius-DiPreta for her assignment. The town ethics board, whose
members are appointed by the town
board, later found that he committed
no “technical ethical violation,” but
said Cuthbertson should disclose
such appointments in the future.
The judge in both receiverships
was Whelan.
When he was assigned the case of a
foreclosed medical building in Islandia in 2008, Whelan named Cuthbertson to the role of receiver, the
person who manages a building’s
finances and overall operation.
Whelan chose Melius to run the
building day-to-day as property manager. He was not on an approved list
of professionals established by the
courts after repeated scandals involving judicial appointments of donors
and cronies.
Because Melius was not on the list,
court rules required Whelan to write
a finding “of good cause” to appoint
him. In similar instances, other judges
have cited a person’s particular expertise with an unusual type of property,
like a horse farm. The Islandia property is an office building.
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NEWSDAY INVESTIGATION
mission of wrongdoing.” His
spokesman, Gary Lewi, has said
Schlesinger “discharged his fiduciary
duty appropriately.”
Melius has strongly denied any
wrongdoing.
Partnership deteriorates
Other deals involving Melius imploded because of friction between him
and his partners. One involved an
engineer, John Ruocco, who created a
company, Interceptor Ignition Interlocks, that produced a device to prevent
people convicted of drunken driving
from starting their cars if inebriated.
To get an edge on the competition
in the market, court records show, he
gave Melius nearly 3 million shares of
stock in return for help in getting
Nassau and Suffolk to enact regulations that mandated use of technology employed by his company.
Melius reached out to his contacts,
including D’Amaro, the Suffolk legislator for whom he sponsored an Oheka
fundraiser, and the Mangano administration. Both counties approved regulations that favored the company’s
technology, and Interceptor’s market
share soared.
Interceptor’s market share went
from 7 percent to 54 percent in Nassau. In Suffolk, the company’s market
share increased from 13 percent to 22
percent.
But the partnership deteriorated.
Melius sued Ruocco, and, with the
approval of both sides, the case was
decided by Whelan. He issued a
ruling that gave Melius control of the
company’s stock.
A New York State appeals court
eventually reversed Whelan’s decision, saying that he had failed to hold
a jury trial, as Ruocco had requested,
and thus should not have granted
summary judgment in favor of
Melius. Ruocco has said he hopes he
can revive the company.
Prior to the appeals court decision
in December 2016, Melius had struggled to put Interceptor completely
under his control.
At the first board meeting after
Whelan’s decision, on Feb. 21, 2014,
Melius added one ally to the board
but was unable to gain a majority.
Three days later, Melius was shot.
NEWSDAY, SUNDAY, FEBRUARY 25, 2018
newsday.com
A shooting unfolds
The grainy video lasts all of 49 seconds. It starts with Gary Melius in a
dark winter jacket striding on a diagonal from the lower right of the frame
across the rear parking lot of Oheka
Castle. After about 12 seconds, he
reaches the driver’s side of his black
Mercedes and lowers himself in.
As he does, a dark sedan leaves the
lot. It circles behind him, slows
briefly and pulls out of the frame.
Eighteen seconds later, a tall man
wearing a winter jacket becomes
visible getting out of an SUV at the
far left of the frame, hunching a bit
and moving quickly as he snakes
among three cars to reach the driver’s
side of the Mercedes. Only the back
of his head is visible as he fires the
shot that strikes Melius in the left
temple. He remains there two and a
half seconds.
The gunman then hustles away,
crouching at two points looking toward his hands and then back at the
car, as a worker emerges from behind
a building at the parking lot’s edge.
Next, the shooter vanishes, about 13
seconds after he first appeared.
He remains unidentified to this day.
After the shooting, detectives
sought the names of Melius’ adversaries, trying to determine who might
have a motive for doing him harm.
They knocked on a lot of doors,
including that of Ruocco, whose
former lawyer said he is not a suspect
in the case.
“Simply put, there are so many
suspects,” a law enforcement official
who has been briefed on the investigation said in 2017.
Another law enforcement source
with direct knowledge of the case
said it quickly became clear that
Melius “was connected to everybody”
and that the list of potential suspects
grew to more than 60 people.
Russian mobsters were caught on
tape chuckling about the shooting,
according to a law enforcement
source, but that lead went nowhere.
In the interview with Newsday editors, Melius voiced suspicions about a
restaurateur, but nothing has surfaced
about that, either.
Melius’ friends and family offered a
$100,000 reward and hired a billboard
truck, which was briefly parked in a
Newsday lot to announce it.
But an official involved in the case
said that when questioned, Melius
had given leads to detectives that did
not prove fruitful.
Melius said he has cooperated fully
with police. But he may have hinted at
tensions with law enforcement authorities’ handling of the investigation in a
comment to Newsday reporters several
months after the shooting about the
prosecutor heading the investigation,
Nancy Clifford. “If I don’t like her, I
won’t tell you,” he said.
He blamed the police department
and Suffolk District Attorney Thomas
Spota for failing to solve the shooting
in the interview with Newsday editors. Spota was indicted last year for
allegedly obstructing a federal investigation into the beating of a prisoner
by former Suffolk Police Chief James
Burke and its cover-up.
“I think the PD screwed up, Tommy
Spota screwed up by not putting out
the picture of that car,” Melius said,
referring to the fact that the Suffolk
Police Department released the video
two years after the shooting. A
spokesman for Spota said last year that
it is standard procedure not to release
such videos in an ongoing investigation.
The police department declined to
respond to requests for comment.
Burke, the police chief who headed
the shooting investigation, went to
federal prison in 2017 for his assault
of a suspect in 2012. Spota, Burke’s
longtime mentor, and one of his chief
aides were indicted in October 2017,
accused of being involved in covering
up the assault. Spota retired in November, maintaining his innocence.
The fallout
Since the shooting, FBI agents have
carted away boxes of material from
Oheka. Melius said the agents had
found nothing incriminating. “The FBI
came to me and they wanted my stuff
and I gave them 180 boxes of stuff,” he
said. “And you know how many I had
my lawyer look at? None. I have nothing to hide. I gave them everything.”
Melius said his life has fallen apart,
as well. He can’t drive because he
suffers seizures, and he can no longer
enjoy a bourbon or a cigar, he told
Newsday editors.
His wry conclusion: “I will never do
that again, getting shot in the head.”
Oheka is also hurting. It had a net
operating income of $2.38 million in
2014, according to Bloomberg’s financial data. That fell to $1.82 million in
2015 and $742,577 a year later.
In July 2015, Melius’ mortgage
company, LNR Property LLC of
Miami Beach, noted that Oheka required “substantive repairs” and
needed a monthly budget of $72,455
for maintenance.
In December 2015, he stopped
making mortgage payments, according to Trepp LLC, a Manhattan property data company. He was hit with a
foreclosure lawsuit that continues. As
of January, he owed $26 million on
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At times like these, the cozy network of Long Island politics has been
Melius’ reliable safety net.
In mid-August, as the battered
Mangano administration faced its last
months in office, it placed an item on
the Nassau Legislature’s agenda that
would allow Melius to connect
Oheka, which is close to the NassauSuffolk border, to Nassau’s sewage
dates to succeed Mangano immediately voiced skepticism.
Melius told a reporter in October
that he would not comment because
the Newsday news article on the
sewer hookup had “cost me millions.”
A new leader has taken the helm in
Nassau, with Laura Curran, a Democrat, as the new county executive. In
Suffolk, upstart Democrat Timothy
Sini has taken over the district attorney’s job. They have promised to
restore integrity to government.
But in an election season imbued
with the drumbeat of reform, there
were quieter lessons about the
resilience of machine politics. In
Suffolk, the Democrat, Errol Toulon
Jr., defeated a Republican in the
county sheriff’s race with Conservative and Independence Party sup-
Gary Melius at Cold Spring Country
Club in 2009, with his neighboring
Oheka Castle in the background.
port, which provided the margin of
victory.
Sini won after a similar cross-endorsement deal. Curran celebrated
her victory at a news conference in
which she stood next to Nassau’s
Democratic leader, Jacobs.
Melius, now 73, with many friends
fading from the scene or already gone
but others holding fast, finds himself
again in a place both precarious and
familiar — facing seemingly tough
odds on the playing field of Long
Island politics.
The question is whether the rules
of the game have changed, or whether
they easily can be.
NEWSDAY COM/PATHWAYTOPOWER
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NEWSDAY, SUNDAY, FEBRUARY 25, 2018
Facing tough odds
system — quite literally the last link
needed to fully realize a vision of
Oheka he has harbored since 1984.
The hookup would handle a projected 156,000 gallons of wastewater a
day from the condos Melius won
approval to build in 2012. The proposed agreement called for Melius to
pay $425,000 to connect to the Nassau
system, as well as $23,000 for a sewer
permit.
For a proposed development across
the street from Oheka, the figures are
strikingly different. It would pay
more than twice as much for fewer
than half the units and less than a
third of the projected wastewater.
When news of the proposal
emerged, the item was yanked from
the agenda and, in an anti-corruptionthemed campaign season, both candi-
newsday.com
Oheka’s two mortgages.
“I am not sitting up there counting
bills and money,” he said. “I don’t
have it. I’m fighting for my life.”
The long shadow Oheka casts over
local politics seems to have grown a
little shorter, too. Meetings with party
leaders, other than MacKay, have
diminished, by many accounts.
●
ELLIOTT KAUFMAN
NEWSDAY COM/PATHWAYTOPOWER