Mangano retrial witness: Singh loans arrangement 'complete sham and not legal'

This story was reported by Nicole Fuller, Robert E. Kessler, Bridget Murphy and Andrew Smith.  It was written by Murphy.

A lawyer who worked for Oyster Bay testified Tuesday at former Nassau County Executive Edward Mangano’s corruption retrial that he had advised the town against backing loans for Harendra Singh, calling the arrangement “a complete sham and not legal.”

Jonathan Sinnreich, who served as Oyster Bay’s outside counsel from 2005 to 2015, said he objected in 2010 to helping deputy town attorney Frederick Mei draft amendments to two of Singh’s food venue concession agreements.

“It was immediately clear to me that the deal was completely illegal and financially dangerous to the town,” the prosecution witness testified in U.S. District Court in Central Islip.

The government claims Edward Mangano gave Singh illegal kickbacks that included using his political clout to help the restaurateur get $20 million in Oyster Bay-backed loans.

The former county executive, 56, and his wife, Linda Mangano, 55, are standing trial for the second time on felony charges after their first trial ended in May in a mistrial.

Prosecutors say Singh bribed the politician with expenditures that included free meals, vacations, furnishings and a $450,000 “no show” job for Linda — who’s accused of lying to the FBI.

Singh got his first town-backed line of credit after what prosecutors say was a pivotal meeting about the loan deal in April 2010 that Sinnreich testified about Tuesday.

Sinnreich recalled seeing Edward Mangano standing “immediately behind” Singh at the campaign headquarters of former Oyster Bay Supervisor John Venditto as political appointees and two attorneys from Mangano’s former law firm, Rivkin Radler, tried to find a way to make the town-backed loan concept work.

Venditto told everyone at the meeting’s end that he wanted to find a way to help the restaurateur before Mangano also chimed in, according to the witness.

“Ed Mangano put his hand on Mr. Singh’s shoulder and said something to the same effect,” Sinnreich testified.

But Sinnreich said he’d repeatedly told Mei and Oyster Bay deputy supervisor Leonard Genova before the April 2010 meeting not to go forward with the loan deal.

The witness explained during questioning by Assistant U.S. Attorney Catherine Mirabile that a municipality is forbidden under New York’s constitution from making a gift to a private party.

Sinnreich said the town was being asked to sweeten an existing deal with Singh and getting nothing in return, adding: “That’s a gift.”

The attorney also testified that the constitution also bars towns from guaranteeing loans to private parties. These agreements, Sinnreich said, didn’t require Singh to spend the proceeds of a loan on the town and imposed no controls on how the restaurateur used the loan.

If Singh defaulted on repayment, the town would be on the hook not only for the loan but also for all the bank’s costs, Sinnreich said.

The witness said Rob Walker, then Nassau’s chief deputy county executive, and Rivkin Radler attorneys William Savino and William Cornachio also were at the meeting at Venditto’s Massapequa headquarters.

Sinnreich said he didn’t know the Rivkin Radler attorneys would be present, and he believed, based on their behavior, that they represented Singh.

“They were clearly concerned with his interests,” Sinnreich testified, saying he found out later that those lawyers were working for Oyster Bay at that time.

Sinnreich said he discussed his objections to the town backing a loan for Singh at the meeting. But he said that after the gathering, he was excluded from matters involving the town guaranteeing loans for Singh.

The witness testified that he heard later that Cornachio had come up with a way for the town to back the loans indirectly, by Oyster Bay promising to pay the bank the value of Singh’s investments if Singh defaulted on repayment.

“I told Mr. Mei what was being proposed was bogus and a complete sham, and not legal,” Sinnreich said. “I didn’t even know until 2015 that a deal had been done.”

On Monday afternoon, a banker who had worked for Madison National Bank testified that the lending institution initially rejected Singh’s bid for $1.5 million in credit to use in connection with his Tobay Beach concessions agreement after reviewing his finances.

But witness Thomas Gilmartin of Madison National said that changed after the bank learned Oyster Bay would guarantee the deal.

There was a snag, according to the witness, when Mei told him there could be a problem with the town guaranteeing the loan.

But Gilmartin said that’s when Mei relayed the solution that if Singh defaulted on repayment, the town would assign the value of Singh’s investments at the South Shore beach venue to the bank.

The witness testified that both the $1.5 million and $3.4 million deals Singh landed that year with the bank had that caveat, without which the transactions wouldn’t have gone forward.

Gilmartin told Edward Mangano’s attorney, Kevin Keating, during a cross-examination that the deals also wouldn’t have happened if the bank knew Singh had lied about his net worth or had paid an outside law firm to vouch for the legality of the transactions.

On Tuesday, Keating asked Sinnreich during a cross-examination if any of the thousands of legal opinions the attorney had given over his career had been wrong.

“I don’t think my opinions have been wrong very often, but sometimes they have been determined by the courts to have been wrong,” Sinnreich acknowledged.

Sinnreich said one of the first meetings he attended with Oyster Bay officials took place in 2005 in the basement of one of Singh’s restaurants.

The witness said the officials were discussing a request for proposals that had not yet been publicly released, and agreed with Keating that it appeared Oyster Bay personnel were rigging the contract for Singh.

“That’s how I saw it,” Sinnreich said, explaining that at the time he told Genova he was uncomfortable with the proceeding.

“The town never did that again,” the witness added.