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Panoramic Ponzi Plea

Panoramic Ponzi Plea

Callahan pleaded guilty to securities and wire fraud in connection with his purchase of Montauk’s failing Panoramic View resort. Seen here at Panoramic View resort in 2007
Partner admits guilt in $118 million scheme
By
T.E. McMorrow

It was “one of the largest investment frauds in Long Island history,” said a federal district attorney on Tuesday after Brian R. Callahan of Old Westbury, 44, pleaded guilty to securities and wire fraud in connection with his purchase of Montauk’s failing Panoramic View resort.

Prosecutors from the office of Loretta E. Lynch, United States Attorney for the Eastern District of New York, had accused Mr. Callahan of diverting monies deposited by investors in his mutual and hedge funds to prop up the motel’s shaky finances. With his brother-in-law and co-defendant, Adam J. Manson, a New York resident with offices in Montauk and Great Neck who has pleaded not guilty and will be tried later, he ran a Ponzi scheme that eventually defrauded investors of some $118 million, of which $96 million has yet to be recovered.

 The two men bought the resort for $32 million in October 2006. By that time, the D.A. charged, Mr. Callahan, in his capacity as an investment adviser, had already set up a number of offshore shell accounts, creating various hedge funds that held out the promise of multimillion-dollar profits. Each fund, Ponzi-like, would hide the losses of the ones previously created. Mr. Manson is not named in any of those schemes, in which Mr. Callahan is said to have exercised sole control.

The Montauk Fire Department turned over its $600,000 scholarship fund in February 2008 to Mr. Callahan before thinking better of it and pulling the money out in time, after fire commissioners became wary.

The brothers-in-law had planned to sell the Panoramic units as co-ops. They borrowed $45 million from an unnamed financial institution to cover the purchase and renovations, but ran into trouble early on at the start of the long recession. With the units languishing on the market, they found themselves unable to meet the bank note, and, facing foreclosure, ramped up a series of come-ons designed to cover their losses. These included the fire department funds; commissioners were told the money would be invested in mutual funds. Instead, it went to cover the ever-widening debt. Mr. Callahan, who was said to be living the high life, created fake books to cover his crimes, according to the grand jury that indicted him.

In February 2012 his independent auditor resigned. That was the beginning of the end: the Securities and Exchange Commission stepped in the following month.

Under the terms of a plea agreement, Mr. Callahan now faces up to 40 years in prison. As part of the deal, he agreed to forfeit $67.4 million to the government as a fine, including money received from the sale of his properties in Westhampton and Old Westbury. He will be sentenced on Aug. 8 in Central Islip, in the courtroom of U.S. Magistrate Judge A. Kathleen Tomlinson. He remains free on a $2 million bond secured by homes belonging to his sister and father. Zugiel Soto of the D.A.’s office said Mr. Callahan’s victims would be allowed to speak as part of the sentencing process.

The 10-acre beachfront Panoramic, meanwhile, remains under the ownership of the brothers-in-law. The company did not respond to a phone inquiry made yesterday.

 

From Ghost Nets to Skateboards

From Ghost Nets to Skateboards

Kevin Ahearn Jr. showed a group of Ditch Plain regulars a fish-shaped prototype of a skateboard made from recycled drift nets.
Kevin Ahearn Jr. showed a group of Ditch Plain regulars a fish-shaped prototype of a skateboard made from recycled drift nets.
Russell Drumm
Green dream becomes a business plan, and a mission, for Montauk surfer
By
Russell Drumm

Turn used fishing nets into skateboards. An idea that would have seemed utopian green only a few years ago is being brought to fruition by three surfers with engineering degrees and a shared goal of ridding the ocean of plastic pollution, ghost nets in particular.

The ghosts in question are drift, or dragged, nets that continue to snag fish and marine mammals long after they are either lost or dumped at sea. A campaign to fund the first production run is now in progress through Kickstarter.com.

It all began in 2011 when Kevin Ahearn Jr. of Montauk and East Hampton, David Stover of Block Island, and Ben Kneppers, a Cape Cod native, met up in Sydney, Australia.

Mr. Ahearn was there at the tail end of a 10-month, around-the-world backpacking trip he undertook after leaving a job with a small engineering firm in Greenport. He subsequently joined the Boeing company in Huntington Beach, Calif., for two years before launching head-on into the net-to-skateboard metamorphosis.

He and Mr. Stover graduated from Lehigh University in 2007 with engineering degrees, Mr. Stover with a concentration in finance. Mr. Kneppers, graduated from Northeastern University with a degree in sustainability. He moved to Chile two years ago to help with government efforts in his field.

“We are all surfers, grew up on the beach, me here, Dave on Block Island, Ben on Cape Cod. Dave Stover was living in Indonesia for a while, and I was in Southern California, and were aware of the problem of ghost nets and plastic pollution,” Mr. Ahearn said during an interview at Ditch Plain Beach in Montauk on Monday.

“The juices started flowing in Australia, the seed of the idea. We agreed we had the skill sets to do something about ocean pollution. We realized the potential of our collaborative careers at that time, but it was over the next two years that we started putting the pieces together and really making things happen,” Mr. Ahearn said.

Mr. Kneppers had learned that discarded fishing nets had become a serious problem in Chile. The country did not have the money or the infrastructure to deal with it. Mr. Ahearn explained that Chilean fishermen used nets made of nylon that typically wore out in about six months.

“They have to pay to dump the nets in private landfills, and as a result manyare cut loose at sea. Ten percent of the plastic pollution found in the world’s oceans takes the form of fishing gear, dangerous for marine mammals and the ecosystem,” Mr. Ahearn said.

“We started talking to the World Wildlife Fund in Chile. They advised us. By this time last year we realized we had something tangible,” he said, that being a continuous supply of material that was almost all nylon, collection points for fishermen to leave their nets, and trucking companies — already hauling fish and supplying the fishing industry — willing to take the nets to Santiago, the nation’s capitol. They named their company Bureo Inc., “bureo” being the word for wave in the Mapuche language of Chile’s indigenous people.

The three amigos traveled to Boston to pick the brains of engineers who worked with plastics in order to develop a process for recycling the nets. They brought the process back to Santiago where a plastics manufacturer, one of South America’s leading recycling companies, had the machinery and liked the idea. The nets would be cleaned, melted down, and turned into pellets for storage — “We call them skateboard sperm,” Mr. Ahearn said. From there, the pellets would be melted again, and injected into a one-ton, steel mold, “like a big waffle iron,” that produces the skateboard blanks.

Mr. Ahearn said products made from fishing nets are not limited to skateboards alone.

“Midsummer of 2013, we all moved to Chile and spent six months turning our computer models to work,” he said. The surfing engineers got a leg up from the Chilean government’s Start-up Chile program designed specifically to attract global entrepreneurs. “They gave us $40,000, a place to live, and a place to work.”

As he explained the short history of his endeavor on Monday, a group of Ditch Plain regulars listened intently while inspecting and approving of a fish-shaped prototype of the skateboard.

Once the skateboard blanks are finished in Chile, they will be sent to the Satori Wheels company in California. Satori will supply the “trucks,” as the wheel and axel hardware are known. “Their wheels are 30-percent vegetable based instead of petroleum-based urethane.” At first, the skateboards will be sold through the company’s website, bureoskateboards.com, then through shops “that speak to our message,” Mr. Ahearn said, that being green and sustainable.

Bureo’s goal is to raise at least $25,000 to pay for the first production run to test the market. “By donating to Kickstarter you are rewarded with a skateboard,” Mr. Ahearn said, adding that while the goal was close to being met, “we want people to know that for every additional dollar, we will be able to return to Chile and expand the program faster and make a bigger impact.”

Those interested in helping with the endeavor can go to Kickstarter.com and search for Bureo.

 

Passing On State Testing

Passing On State Testing

Dawn Dunn is opting her son, Logan Abdat, out of this week’s state math test. Logan is one of about 20 students at the Springs School who have refused to take this year’s English and math exams.
Dawn Dunn is opting her son, Logan Abdat, out of this week’s state math test. Logan is one of about 20 students at the Springs School who have refused to take this year’s English and math exams.
Morgan McGivern
Call for ‘common sense,’ not Common Core
By
Amanda M. Fairbanks

Dawn Dunn knew something was amiss when she could no longer help her son, Logan Abdat, with his nightly homework.

Over the past year, Ms. Dunn says her son went from having an hour of homework to as many as three hours each night — and that’s only in math. Logan is 10 years old and in the fifth grade at the Springs School.

Ms. Dunn came to dread the nightly routine. After Logan complained of headaches and stomachaches and the two collapsed into fits of tears on multiple occasions, she finally decided that enough was enough.

“He was crying. I was crying. That’s it. We’re done,” Ms. Dunn said on Monday. She works at WordHampton, a local public relations firm. Her husband teaches Spanish at the Springs School. “Now, almost every piece of homework says test prep on it. It’s too much testing and it’s not working. The kids are completely stressed out.”

All this week, Ms. Dunn has opted her son out of taking part in the annual high-stakes math exam. She is part of a small but vocal group of local parents that have similarly sent in letters of refusal and whose children will be excluded from picking up No. 2 pencils and filling in bubble sheets for hours at a stretch. 

Across New York State, students in third through eighth grades took the English language arts exam last month, with the math exam administered yesterday, today, and tomorrow. It is the second year that students are being assessed using the new national Common Core learning standards, intended to improve critical thinking and enhance problem solving skills. Last year, during the first year of its implementation, districts across the state, including many on the South Fork, reported a sharp decline in test scores.

In the intervening months, the opt-out movement has grown, with parents across Long Island and New York City banding together to boycott the exams. Change the Stakes, a New York City advocacy group, estimates that as many as 1,000 city students declined this year’s test. Last year, 276 students opted out citywide. And across Nassau and Suffolk counties, thousands sat out the recent E.L.A. exam, with growing numbers expected to refuse this week’s exam as well.

Ms. Dunn, along with several parents, first began hearing inklings of a growing opt-out movement on Facebook. Long Island Opt-Out Info, a particularly active group, has nearly 17,000 members, with multiple, impassioned posts occurring throughout the day. Inspired by its popularity, Ms. Dunn recently started another Facebook group. The South Fork Alliance for Common Sense Education now claims around 50 members.

Here on the South Fork, Ms. Dunn is the first to concede that the numbers are quite small by comparison.

At the Montauk Public School, eight students sat out the English exam and nine opted out of the math exam. Amagansett School reported no refusals and Bridgehampton had 1 student who declined yesterday’s math exam. The Springs School, meanwhile, reported 20 refusals, with the East Hampton School District reporting 3 for English and 2 for math.

“If more than 95 percent of kids don’t take the test, you can supposedly be called a school in need of improvement,” explained Jack Perna, the Montauk superintendent. “But with this growing opt-out movement, who knows what the state will do?”

“I respect the right of a parent to refuse to have their children take the state assessments. It is my job to administer the tests on behalf of the state and support our superintendent to define the response of the district to the parents who have chosen to exclude their children from the exams,” said Eric Casale, the principal of the Springs School. “To them, I have said this: We will always treat our students with care and compassion, and that will certainly be the case in these instances.”

Gail Simons, who lives in Montauk and has two children at the Montauk School, counts hers among the handful of families who have opted out.

Of the challenge in recruiting more families, she says geography plays a definitive role. “We have a small population out here. It’s a different mindset. People are more laid back and not as competitive,” Ms. Simons said Tuesday afternoon. “In Montauk, it’s status quo.”

Ms. Simons works as a business manager for a local landscaping company. Her daughter, a third grader, and son, a seventh grader, refused both exams.

Over the past few months, once she started researching the Common Core, Ms. Simons said it became a bit of an obsession. Though she described herself as “quite liberal,” she conceded that many opposing the test tend toward the more conservative end of the political spectrum.

To opt her children out of the exams, she sent in what she described as a “stern refusal letter” to teachers and the superintendent — basically anyone who would come into contact with either of her children.

In general, she described administrators and teachers as “extremely supportive of the refusals.” During the blocks of state testing, her children were sent to the school’s art room, where they worked on art projects, read, and completed assigned packets of work.

At the Springs School, Lily Valleau-Lowney, a fifth grader, sat out this week’s math exam in the library along with nearly two dozen of her peers.

Her mother, Lynn-Marie Valleau, who helps run a wine store in East Hampton, sent her daughter with a packet of work to complete, downloaded from Education.com, a website geared toward parents looking to provide their children with supplementary educational materials. Her father, James Lowney, works in real estate.

“They started changing things and making guinea pigs out of our children,” Ms. Valleau said of her opposition to the Common Core and what she described as an increased emphasis on test preparation. Last spring, her daughter reported that the test had included material they had never encountered. Since last spring’s exam, Ms. Valleau has observed a huge uptick in the number of students now qualifying for academic support services.

“When a whole school needs after-school help in math and English, don’t tell me there’s not something wrong,” she said. “I think children need to be children. You don’t have to start getting ready for the SATs and college in these younger grades. Let them have a childhood. I turned out okay.”

So far, at least, Ms. Dunn describes the movement as grassroots. She, too, has had a difficult time recruiting more parents. “Our life is fine. My kid is doing fine. It’s just a test,” she said, explaining what she perceives as the pervasive mind-set. “They don’t want to take the time to get involved and find out more.”

Mostly, she sees it as a political battle, with Bill Gates, the education philanthropist, Pearson, the testing company, and the federal government as the primary targets of her frustration.

Over the summer months and into the fall, she hopes to recruit other parents who share in her sense of outrage.

“I want him to have a nice childhood,” said Ms. Dunn, referring to her son, Logan. “I feel like it’s being taken away.”

 

Board Supports a Deer Spaying Plan

Board Supports a Deer Spaying Plan

By
Christopher Walsh

The East Hampton Village Board gave spaying as part of a deer management program unanimous support last Thursday. Spaying had not been mentioned publicly, but it was discussed at a closed meeting on April 9 between village officials and Anthony DeNicola, a wildlife biologist and president of White Buffalo, a nonprofit research and management organization. He is reported to be an expert on spaying programs.

Board members expressed support for spaying in conjunction with culling at the meeting after the executive director and chairwoman of the Village Preservation Society urged the board to move ahead. Offering a $5,000 grant contingent on a formal plan of action, Kathy Cunningham, the executive director, and Joan Osborne, the chairwoman, asked the board to include spaying in the village plan. Immunocontraception was not discussed.

“We’ve been approaching you probably for two years now on this topic and don’t know why it’s taking so long,” she said. Spaying “has been shown to be 100-percent effective,” Ms. Cunningham said.

Referring to the meeting with Dr. DeNicola, Ms. Cunningham said her group had not been invited, “which was not a little insulting.” She spoke of frustration with the village’s failure to promulgate a plan incorporating spaying, which she said should take place in the autumn, before does are pregnant, and for which a months-long permitting process would be required by the State Department of Environmental Conservation.

“I would hope that you recognize that your board of trustees is trying to be inclusive and explore any and all potential programs that might be the beneficial way to go,” Mayor Paul F. Rickenbach Jr. said to Ms. Cunningham. He added that the 2014-15 village budget, which has not been finalized, would include $15,000 for deer management. “Give the board credit for trying to do the right thing. We’re just trying to come up with the best possible medium as we move ahead.” A budget hearing will take place on June 20.

“Okay, I hear you,” Ms. Cunningham replied. “You have to get this permitting process off the ground,” she said, “and you can only get it off the ground when you commit to doing the program.” She said it would require hiring an expert to detail how spaying would be done and provide oversight. “There’s pretty rigorous protocols that need to be met by the D.E.C.,” she said, in order to receive a permit.

According to Ms. Cunningham, a spaying program in Cayuga Heights, N.Y., has been highly effective, and the use of volunteers such as veterinarians in a program’s second year could cut the cost in half. “It’s a community service that people would be interested in participating in,” she said.

Asked if spaying would begin in the fall, Mr. Rickenbach said, “That would be the hopeful objective.” He reminded Ms. Cunningham that after the Long Island Farm Bureau and the Department of Agriculture proposed culling, “residents became frantic with respect to what was going to happen.” The village as well as East Hampton Town abandoned the proposal last winter, at least temporarily. “We’re reconnoitering and we’re going to come up very shortly with a product,” he said.

When Ms. Osborne followed Ms. Cunningham to the dais, she spoke of landscape destruction, ticks carried by deer, deer-vehicle collisions, and the proliferation of deer fences. She asked the board to provide a line item in its 2014-15 budget for spaying, “And I would ask that you act today,” she said.

After the meeting, Ms. Cunningham said spaying,  in which does’ reproductive organs would be removed, would occur in the field. Deer would be attracted to a bait station, trapped, and sedated before the procedure, which she said would take approximately 20 minutes.

She also issued a press release that called cutting the deer population by 50 percent in the village impossible. It also said the $5,000 grant was contingent on the board’s commitment to a spaying program “within a reasonable time frame.”

“The village board has been promising for some time now to incorporate a deer spaying program into existing lethal methods of controlling deer populations in the village,” it said, calling spaying more “socially acceptable” than other

Shark, Pro, Worker Bee

Shark, Pro, Worker Bee

By
Debra Scott

There are certain qualities that all successful Hamptons real estate agents share, persistence and focus topping the list. The competitive profession — there are more than 1,000 agents out here — requires stick-to-itiveness, and doesn’t reward slackers or those in the biz to kill time. Yet each agent who’s made the climb to the top, or is en route there, has something special that distinguishes him or her from the herd. Here are just a few types that local brokers helped identify. As for lucky, no one would hear of that; you can’t consistently be a top producer by accident, they said.

The Helper: Truly nice, this is a usually a young buck who goes overboard to help both customers and rival agents, thus turning them into allies. Helps older agents with technical issues, or helps with showings and open houses. Is rewarded by sharing in listings.

The Connector: This is a smooth operator who can penetrate the insular worlds of the rich and famous. Some infiltrate high society, others the financial or celebrity worlds. Those who can walk the walk and talk the talk of the rich and powerful are able to break into all three. These sorts of customers like agents who understand their lifestyle.

The Philanthropist: Agents who volunteer on local ambulance squads, the Ladies Village Improvement Society, or other charitable organizations get an automatic advantage. People care that they care. 

The Pro: Shows up as if going to a corporate job. Smartly turned out in designer duds as if he takes his job seriously, which he does. Known for attention to detail and follow-up.

The Shark: A nasty piece of work. A screamer who screws other brokers on their deals. You know who you are. He bites off his own fins because no other brokers want to show his listings. He will tell his client to lower the price because no one’s biting. But it’s his bite that’s scaring buyers away. Not to be confused with . . .

The Bottom Feeder: This unscrupulous type poaches customers from other brokers. Maybe he meets a customer being shepherded by his agent to an open house. Next thing you know he’s Googled their names and found their number. He calls and says, “I couldn’t get ahold of your agent but I wanted to tell you about. . . .” A lie. Or he blatantly hands out his card. Or, he runs into your customer at a party or the gym and badmouths you.

The Extrovert: Warm and fuzzy, they do a lot of business because they’re likable and friendly.

The Schmoozer: Some call it brown-nosing, but on the bright side let’s call it genuine concern. Some agents just know how to ask the right questions — “How’s your dog?” — and remember the name of the pooch in question.

Queen Bee: Now that the market has changed and customers rarely walk in the door of an office anymore, the heavy hitters who have done the most deals and have the biggest customer bases get referrals by the barrel. On the negative side, as they are often too grand to view a listing under umpteen million, they don’t know the inventory as well as lower profile agents. The going wisdom is that the superior is not necessarily the one who sells the most properties, but is the agent who sells your house at top dollar.

Worker Bee: With teams so prolific, there is usually one agent in the spotlight and another who is the silent partner working hard behind the scenes, doing the grunt work so the superstars look good.

Dealmaker: Knows the business inside out from building to financing. Some actually build their own properties or have partnered with builders. They know how to put a package together for the kind of customer who wants a $6 million house south of the highway. While most agents will turn up their noses at such an ignoramus who clearly doesn’t know that such an animal doesn’t exist, the dealmaker will find them land and a builder who can come in at the right price, a creative solution to a problem less innovative agents might think impossible.

The Townie: This one relies on local connections getting customers and referrals from lifelong friends, family, and acquaintances who knew his dead grandparents, parents, aunts, uncles, and cousins twice or thrice removed.

Chemical From Poles Now at Issue

Chemical From Poles Now at Issue

The soil around a PSEG pole on Town Lane
The soil around a PSEG pole on Town Lane
Long Island Businesses for Responsible Energy
Consultants inject soil contamination into PSEG fight; meeting is Saturday
By
Joanne Pilgrim

Lawyers building a case against PSEG Long Island, the company that has angered some residents with its aboveground installation of a high-voltage electricity transmission line from East Hampton Village to Amagansett, will meet Saturday with residents along the route, potential plaintiffs who could claim that the project has damaged their property values and poses a danger to their health.

A report this week by environmental consultants hired by the group organizing the legal action, Long Island Businesses for Responsible Energy, indicates high levels of a toxic wood preservative chemical found in soil around the new utility poles, and recommended that steps be taken to test nearby groundwater and protect the public from contact with the chemical.

A review of the project by the state’s Public Service Commission is under way, at East Hampton Town’s request, with portions expected to be completed by Wednesday, according to a recent letter to the town from Audrey Zibelman, the commission’s chief executive officer, who visited East Hampton early this month.

Ms. Zibelman said in an April 15 letter to Supervisor Larry Cantwell that the agency would review the need for the new transmission line for continued reliable energy service, as PSEG has asserted. The department will also evaluate the costs that would be associated with burying the line, as critics have called for, and analyze whether local alternative energy generation projects could meet additional energy needs. PSEG Long Island will be asked, Ms. Zibelman said, to share with the town its overall plans for energy service over the next years.

In the face of complaints about the initiation of the transmission line project here, which took many by surprise, the state officials will, Ms. Zibelman said, review the public outreach process followed by PSEG — seeking, according to her letter, “to ensure communities remain informed about changes PSEG-LI is considering, while also including a thorough analysis designed to meet reliability needs, such as energy efficiency, demand response, and renewable energy options that will help reduce the impact on the local environment.”

The agency is conducting a similar review of a PSEG Long Island project in Port Washington, where community protests are also taking place.

In a response to Ms. Zibelman, State Assemblyman Fred W. Thiele Jr. said that while the commission’s review is welcomed, “at this point, the bottom line for the community is how to remove the overhead transmission line, and how to equitably pay for its burial if it is necessary for reliability.”

“PSEG-LI has withdrawn from public discussions,” Mr. Thiele said. The utility has indicated a willingness to discuss burying the line, but only if local ratepayers shoulder the entire cost of the transmission line upgrade. A cost-sharing scenario similar to one employedseveral years ago in Southampton Town was rejected.

Taxpayers on the East End, the assemblyman told Ms. Zibelman in a letter, voted to support the community preservation fund tax in order to preserve scenic vistas, and “the placement of 60-to-70-foot transmission lines and utility poles through historic villages and scenic farms and open spaces by PSEG-LI and LIPA diminishes the value of this public investment by the town in excess of the cost of undergrounding a transmission line.”

Early this week a second judge denied PSEG Long Island’s request for a temporary restraining order overturning an order by the town stopping work on the utility’s Amagansett substation. The town asserts that the project, which has included extensive clearing and the construction of a building and chain-link fence, required town permits. PSEG has argued that it is exempt from that requirement. The company is seeking to appeal the ruling on the restraining order and pursuing a request to the court for a preliminary injunction to prevent the town from interfering in the utility project.

Long Island Businesses for Responsible Energy, which has called for the wires stretching between PSEG’s substations on Buell Lane in East Hampton and Old Stone Highway in Amagansett to be buried away from residential neighborhoods, and for the wider and taller utility poles installed to carry them to be removed, hired Dermody Consulting, an environmental consulting firm, to inspect the new utility poles and test soil samples taken from the area adjacent to three of them — two on Town Lane, including one at the intersection of Windmill Lane and Town Lane in Amagansett, and one on Gingerbread Lane in East Hampton Village.

In a report, the consultants say that the poles have been treated with pentachlorophenol, a wood preservative known as penta, which the federal Environmental Protection Agency calls “extremely toxic to humans from acute (short-term) ingestion and inhalation exposure.”

The consultants, the report says, inspected recently installed utility poles on April 10 and noted a “dark amber color, apparently due to their recent treatment of penta,” and a “significant chemical odor” from at least 15 feet away from at least one of the poles. At some poles, according to the report, there was “dark, stained soil” within mounded soil around the pole, or a “ ‘halo’ of wet, chemical-saturated soil” within a four-inch area extending from the pole.

The consultants surmised that liquid containing penta “may have been poured onto the soil to percolate into the underlying soil, adjacent to the subsurface portion of the poles.”

Soil samples were taken about six inches away from each of the three targeted poles on April 11, from a shallow area as well as a deeper hole 12 to 18 inches below grade, and tested in a New York State Health Department-approved lab.

The results indicate that significantly elevated concentrations of penta were detected in the soil at both shallow and deep locations at two of the three poles; none was detected at the other.

The chemical levels at the two poles, which the consultants said posed a risk through inhalation, ingestion, and contact with skin, were far in excess of the 800 micrograms per kilogram threshold that the D.E.C. sets for penta-contaminated soil cleanup targets, at concentrations from 29,000 micrograms per kilogram to 250,000 micrograms per kilogram.

The consultants note in their report that penta, which the E.P.A. banned for public use in the United States in 1987, has been banned in 26 countries. Its use in this country is restricted to wood preservation on utility poles and railroad ties.

The Dermody report concluded that “the presence of penta on the poles and in the soil in the vicinity of the poles appears to represent a significant risk to human health and the environment.”

“At the poles where penta is present, there is also a high potential for the penta to leach downward through the soil and contaminate the groundwater,” the report says.

The consultants recommend removal of the chemical-saturated soil around the poles as soon as possible, and that residences in the area with private wells, where groundwater is downgradient of the poles, have their water tested frequently and consider drinking bottled water.

In addition, they suggest installing safety fencing around the poles to prevent contact with them, and the posting of notices warning that the poles and the soil around them should be avoided.

The consultants also suggest issuing the report to an attorney who can determine if the release of penta to the soil should be reported to the State Department of Environmental Conservation.

Mr. Cantwell said Tuesday that the town had received a copy of the report, and that he had referred it to town attorneys and the Natural Resources Department for review.

The meeting on Saturday for potential plaintiffs who live along the six-mile route of the new transmission line will take place at Town Hall from 1 to 4 p.m. The business group has hired two lawyers, Irving Like and Leon Friedman, to represent plaintiffs in a lawsuit centered on the impact of the high-voltage line on property values, aesthetics, or environmental and personal health and safety.

Contributions to help with the legal fight have been requested and can be sent to L.I.B.F.R.E., c/o Helene Forst, 176 Newtown Lane, East Hampton 11937.

 

Arson Suspect Jailed

Arson Suspect Jailed

David Osiecki, accused by Southampton Town police of setting fire to a Dune Road, Bridgehampton house, is being investigated by other police agencies looking for connections to other recent fires.
David Osiecki, accused by Southampton Town police of setting fire to a Dune Road, Bridgehampton house, is being investigated by other police agencies looking for connections to other recent fires.
T.E. McMorrow
Police investigating Amagansett house fire, others
By
T.E. McMorrow

A Sagaponack man is being held on $500,000 bail and has been ordered to undergo psychiatric evaluation after being accused of setting fire on Saturday to a $34 million Dune Road house in Bridgehampton.

David Osiecki, 54, was arraigned on Monday in Southampton Justice Court, two days after being charged with arson as a felony. Justice Andrea Schiavoni declined to issue an order of protection for the owner of the house, which is routine, until the results of the evaluation are known. “We don’t know if you would understand what is happening,” she said to the defendant.

Mr. Osiecki, who was represented by Brian J. DeSesa of Edward Burke Jr. and Associates, told the court he had been hospitalized twice recently for possible mental illness, the most recent being for 33 days in Stony Brook University Hospital’s psychiatric ward. A friend of the defendant, who was in court, said Mr. Osiecki has been in declining mental health for the last five years.

The fire at 187 Dune Road, a two-story structure, was reported to the Bridgehampton Fire Department at 5:48 a.m. Saturday. Heavy smoke was coming from the house when volunteers arrived. The rapid intervention team from Southampton was brought in to assist, along with an engine from the Sag harbor Fire Department.

 According to the felony complaint on file with the court, Mr. Osiecki told the police “he started the fire and that it took him three hours to get it going.”

Mr. Osiecki is also facing a misdemeanor charge of arson, stemming from a fire in a mulch pile the previous morning. According to the complaint, Mr. Osiecki had been targeting a wireless phone tower near the train tracks and 219 Hayground Road. He reportedly said he had spent six hours building that fire, which was initially thought to have been a brush fire. Police are now investigating any possible connection between Mr. Osiecki and other recent fires.

One recent fire that police are looking at started and went out in Northwest Woods without the East Hampton Fire Department being notified. Capt. Chris Anderson of the town’s Police Department said a contactor working on a house on Northwest Landing Road called police on April 12, after discovering the remains of a fire in the garage, Captain Anderson said. He confirmed that the department was also examining the circumstances surrounding a fire that consumed a house in Amagansett last week.

The seven-bedroom, eight-and-a-half bathroom post-modern house on Dune Road had been offered for sale by Corcoran Group Real Estate in 2012 for $34 million. It belongs to Ziel Feldman, the founder and managing partner of HFZ Group, a New York City real estate and investment firm.

According to Alfredo Merat, a friend who was in court during the arraignment and who said their children had been friends, the defendant had dealings with Mr. Feldman in the past. “It is amazing what has happened in the past five years,” Mr. Merat said.

Mr. Osiecki had been arrested in March on charges of trespassing and misdemeanor possession of stolen property in Sag Harbor, as well as other charges in Southampton. He went in front of Justice Schiavoni on April 1 in Sag Harbor Village Court, where she also presides. At that time, he dismissed Sabato Caponi, an attorney with the Legal Aid Society, insisting that he had retained private counsel. “I have a letter from my attorney. I have it on my cellphone,” he said. He then demanded a trial, saying he had powerful friends in the press who would attend. 

“I can’t talk to you if you are not represented by an attorney,” the justice said, ordering Mr. Osiecki to reappear in village court on April 15, a date he failed to keep. A warrant for his arrest was issued the next day.

Mr. Osiecki’s arraignment in connection with the Dune Road fire had been scheduled on Sunday morning after his arrest on Saturday. However, Mr. Osiecki told the judge that he was being represented by Edward Burke Jr. and wanted him at his side. The arraignment was put off  for 24 hours, and the defendant was sent to county jail.

Handcuffed and dressed in a white plastic jail-issued jumpsuit on Sunday because his clothing had been confiscated by police as possible forensic evidence, Mr. Osiecki was let out of court by two officers, and stopped to speak with reporters outside.

“It’s Easter Sunday, and I’m taking a day of meditation,” he said in an authoritative, clear voice. Mentioning the owner of the Dune Lane house, he said, “His son has been captured by the Israelis.” He then gave the first names of the members of Mr. Feldman’s family, saying he was trying to rescue them and their artwork and get them to Norway.

When Mr. Osiecki was led into the courtroom on Monday, he looked at Mr. Merat, who was seated in the second row, smiled, and gave a little wave.

“Good morning, judge,” Mr. Osiecki said. He bowed his head with an almost beatific smile. When Justice Schiavoni asked if he was feeling all right, he said, “I’m in  a little pain. My back hurts.” Justice Schiavoni set bail and ordered the evaluation. As he was lead away, he said, “Thank you, your honor.”

“He was always a caring man, a compassionate man,” Mr. Merat said. “He needs a doctor, he needs help. He doesn’t need jail.”

Trustees Reconsider Beach Ban

Trustees Reconsider Beach Ban

May support limited ban at Indian Wells
By
Christopher Walsh

A lengthy and animated debate among the East Hampton Town Trustees on Tuesday evening ended with what was apparently reluctant support for a limited ban on alcoholic beverages at Indian Wells Beach in Amagansett on a trial basis. The trustees, who own and manage most town beaches on behalf of the public, had previously  balked at the town board’s proposal to ban alcohol at both Indian Wells and Atlantic Avenue in Amagansett. The latter beach was not part of Tuesday’s deliberations.

With eight of the nine trustees present, the group debated how to control the hundreds-strong, rowdy crowds of summer visitors who have drawn complaints from residents. The debate was rife with disagreement, with several trustees adamantly opposed to any prohibition. Some warned of a domino effect, causing residents of other areas to demand alcohol bans, while others argued that the proposed ban at two Amagansett beaches would only move crowds elsewhere. The majority seemed to acknowledge that drinking at Indian Wells was a legitimate problem demanding attention.

Diane McNally, the trustees clerk, said she had distributed a draft response to the proposal made by the town board among her colleagues but had not received a reply from a majority. “We need an opportunity to get on the same page, so we can put it back to them,” she said.

Rona Klopman and Diana Walker, both of whom live in Amagansett, were in the audience on Tuesday. They urged the trustees to take action.

Ms. McNally complained that the town board was going to hold a public hearing before the trustees had a chance to make their opinion known. “They could have just waited. This whole issue could have been much simpler,” she said.

Opinions shifted over the course of the lengthy debate, with some trustees seemingly resigned to some degree of prohibition, despite fears of a slippery slope to the loss of other freedoms the trustees advocate, such as beach driving.

 Nat Miller said he understood an alcohol ban within lifeguard-protected areas, but was uncomfortable with its being proposed for only one or two beaches. “Are you going to help the safety there but not in Montauk, not Little Albert’s?” he asked. “I don’t think you are solving a problem by banning it at two spots. You’re moving it somewhere else.”

Brian Byrnes was more receptive to a prohibition, citing safety. “If the lifeguards are focusing on intoxicated behavior in and out of the surf, some of our kids could really suffer,” he said.

As the debate went on (and on), he and others suggested that the ban cover a smaller area than the 2,500 feet that some town officials had proposed. Ms. McNally suggested the area in which alcohol was banned could mirror the rule about where dogs are required to be leashed.

Bill Taylor was among those who wanted to go along with the town proposal. “There’s a large user group of people who want to go to the beach where there’s no alcohol,” he said. But Tim Bock disagreed, saying, “You’re taking people’s rights away.” He reiterated his oppostion to a ban as the meeting went on.

“If we’re going to spend so much time enforcing a behavioral problem,” Deborah Klughers asked, “what about poaching and other issues we’ve been trying to get enforced for so long?” Several of her colleagues agreed that a lack of enforcement was the real problem.

Ms. Klughers suggested that agreeing to a prohibition should be contingent on “an enforcer” on the beach during the times in which it is in effect. “And we should make it very, very clear that this is a trial,” Mr. Miller said.

Ultimately, Ms. McNally settled on a statement that she will distribute among the trustees, and asked for a quick response. Although not yet drafted on Tuesday it apparently calls for an alcohol ban on a trial basis. The ban would span 500 feet east and west of the road end at Indian Wells Highway between 10 a.m. and 6 p.m. on weekends and federal holidays from the Thursday before Memorial Day to Sept. 15.

 “In addition,” she said, “we want any and all other laws enforced: public urination, the noise ordinance, general disorderly conduct . . . . And, an enforcement officer on the beach during the hours of the prohibition.”

Army Corps Offers One Montauk Option

Army Corps Offers One Montauk Option

Steve Couch, at rear, and Anthony Ciorra of the Army Corps of Engineers and Sue McCormick of the state’s Department of Environmental Conservation laid out plans for the downtown Montauk beachfront.
Steve Couch, at rear, and Anthony Ciorra of the Army Corps of Engineers and Sue McCormick of the state’s Department of Environmental Conservation laid out plans for the downtown Montauk beachfront.
Morgan McGivern
Rebuilt beach not viable in short term, feds say
By
Joanne Pilgrim

After months of waiting to hear what the Army Corps of Engineers would offer to do for the town to reinforce the downtown Montauk beach at full federal expense under a Hurricane Sandy recovery program, East Hampton officials and residents learned yesterday that only one option has been deemed financially viable at this juncture: reinforcing the dunes along the shoreline using geotextile bags filled with sand.

The project would cost $6 million, said Steve Couch of the Army Corps, and would involve placing 14,000 geotextile bags along 3,100 feet of downtown shoreline and trucking in 45,000 cubic yards of sand to cover them. The town would be responsible for ensuring that they remain covered.

According to a proposed timeline, for the work to begin in December, the Army Corps and the state’s Department of Environmental Conservation, which would be involved in administration of the project, would need a local sponsor — the town or county — to sign on within the next few weeks.

Under the decades-long federal Fire Island to Montauk Point reformulation study, a number of alternatives were under review for Montauk beach protection when Sandy hit in October 2012 and exacerbated the erosion on downtown beaches as well as elsewhere in the town.

Downtown Montauk, as well as Fire Island, became eligible for an emergency stabilization project, to be fast-tracked and paid for entirely with federal money.

Last fall, the Army Corps proposed alternatives for review that included rebuilding and widening the beach with sand only, or rebuilding and adding a stone revetment or armored dune; relocating buildings and rebuilding the beach; creating a widened “feeder beach” that would send sand downdrift into eroded areas, and filling in the beach and building groins extending into the sea. The groin option, the Corps said, was presented for comparison only and was not seriously considered.

Town officials requested that the agency pursue evaluation of the beach rebuilding options, with and without an armored dune, and to also evaluate a beach reconstruction project using a dune reinforced with geotextile tubes.

Installing a revetment, groin, or hard structure was ruled out pursuant to town coastal policy, which prohibits suchtructures along the oceanfront.

The Army Corps analyzed potential projects according to their costs and benefits.

The costs to complete a project that would adequately protect the downtown buildings near the beach, without using hard structures such as a rock wall or reinforced dune, would be “extremely high,” the agency concluded. However, the Corps conceded that there is potential for a high amount of damage in the area near the downtown beach.

Because of the location of buildings along the dune line, a new dune would have to be constructed seaward of the buildings, and the beach would have to be extended, requiring a large amount of sand used as fill. A high volume of fill would need to be added on a frequent basis to maintain the beach, the Corps said.

The cost of that would exceed the benefits, according to the Corps’ analysis formula, which considers the value of reduced damages to buildings and recreation benefits.

In a March memo to the town, the Army Corps said that the emergency beach stabilization project is considered separate from the overall scope of work that could take place under the Fire Island to Montauk reformulation study.

As a result, the Corps said, any first-round project that requires mobilization of a dredge is not economically viable.

However, additional work beyond the emergency stabilization project could take place over the longer term under the Fire Island to Montauk effort. An alternative, scaled-down plan, which the Corps says is “economically justified,” calls for the periodic addition of sand to the beach to offset long-term sand loss from natural erosion processes.

Preservation Fund Overall Showed 1st Quarter Rise

Preservation Fund Overall Showed 1st Quarter Rise

Hampton Pix
East Hampton Town revenue bucked upward trend
By
Taylor K. Vecsey

State Assemblyman Fred W. Thiele Jr. reported on Thursday that regional revenue for the Peconic Bay Community Preservation Fund was 8 percent higher in the first quarter of 2014 than last year, but that East Hampton's first quarter showed a decrease.

The C.P.F. has taken in $21.85 million in the region as compared to $20.23 million during the same period in 2013. The month of March alone brought in $7.25 million, compared with $4.19 million in March the previous year.

C.P.F. revenue for East Hampton Town, however, was $5.2 million this year and $5.77 million last year, a 9.3-percent decrease. Shelter Island had the biggest decrease among the five East End towns,  22.4 percent, from $670,000 in 2013 to $520,000 this year, while revenue for Riverhead, Southampton, and Southold went up. 

Southampton went from $12.35 million last year to $14.3 million this year, an increase of 15.8 percent. Riverhead had the largest increase, a whopping 66.7 percent, with first quarter revenue going from $510,000 to $850,000. For Southold, revenue was up by 1.1 percent, from $940,000 to $950,000.

Overall, the number of transactions in the first quarter were down, from 2,164 to 1,716, which Mr. Thiele said was unusual. Mr. Thiele said he believed the decrease in the number of sales had more to do with weather than anything else.

"Having watched these numbers for 15 years now, I don't think it's a function of any economic factors," he said Friday. While the number of transactions was down, prices and home values were up. "The thing that influences that the most is what's going on on Wall Street. When Wall Street is up, real estate on the East End is up."

Mr. Thiele said in a press release that 2013 was the second largest year for C.P.F. revenue, exceeded only by 2007. "This reflects the continued strength in East End real estate, particularly Southampton Town, and the continued availability to local towns of the necessary revenues to protect community character," he said.

Since established in 1999, the Peconic Bay Regional Community Preservation Fund has taken in $906.59 million. The 2-percent tax under the C.P.F. expires in 2030.