Corrupt Courthouse Bookkeeper Stole $2.6 Million From The Dead

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Richard Paul leaves Manhattan Supreme Court on Friday. He was the alleged ringleader of four people from the Brooklyn Public Administrator who were indicted and charged with stealing $2.6 million from the estates of the deceased

The New York Daily News by Greg B. Smith and Janon Fisher  -  May 4, 2012
Theft funded lavish shopping sprees for camera equipment, Gucci products, Apple computers and even a New Year’s Eve weekend in Las Vegas: officials

 
Richard Paul was the alleged ringleader of four people from the Brooklyn Public Administrator who were indicted and charged with stealing $2.6 million from the estates of the deceased.  George Bethea was one of four people from the Brooklyn Public Administrator indicted and charged with stealing $2.6 million from the estates of the deceased. 

A corrupt county bookkeeper in the Brooklyn courthouse stole $2.6 million from the estates of dead people and funneled the money to three of his cronies, according to indictments unsealed Friday.  Richard Paul, who worked in the Kings County Public Administrator’s office, used his own password to get access to the funds of people who died without wills, cut checks to phony names and deposited them into a TD Bank account in the Garment District.  

 

Paul, who was arrested in January, and his cohort Taryn Miller, 33, are both charged with two counts of grand larceny. Miller’s husband, George Bethea, 34, and former city department of corrections officer Ransel Sangster, 35, were charged with grand larceny in the second degree. All pleaded not guilty.  “By breaching the public trust in order to line his pockets, the defendant violated his obligations to the City and to all New Yorkers,” District Attorney Cyrus Vance said of Paul. 

 

The fraud uncovered by Investigations Department exposed a weakness in the city’s system of maintaining so-called “abandoned” estates — estates where no legitimate relative comes forward to claim the money.  When the public administrators can’t find next of kin, they’re supposed to send the money by check to the city Finance Department, which holds on to it in case a relative comes forward later.  But investigators discovered the public administrators and finance weren’t double-checking to make sure the money got to where it was supposed to go.  In Brooklyn, investigators discovered one out of every four checks went missing — $12.7 million of $34.4 million from abandoned estates between 2004 and 2011. That included the $2.6 million allegedly stolen by Paul.  The problem may exist in the other boroughs as well, where 567 checks from abandoned estates worth $110 million have been written to the finance department since Jan. 1, 2007, officials said.  Finance auditors are now going back over all those checks to make sure they were deposited correctly Finance auditors are now checking. 

 

"This investigation exposed an audacious and calculated scheme to steal money from the dead” DOI Commissioner Rose Gill Hearn said. “Investigators quickly found that a key insider and his accomplices methodically raided the accounts of a City office charged with safeguarding decedents’ property. DOI is recommending measures to the relevant City agencies to prevent a recurrence of the fraud uncovered by the investigation.”  Paul, who worked at the Public Administrator’s office for 10 years, used his own password to log into the computer that controls the funds, prosecutors say.  Starting in August 2008 through November of last year, prosecutors say he cut checks for draw-dropping amounts of cash. Sangster, deposited a $390,287.41 in his bank account in August 2008 and another for $200,000 in November 2011 while he was still working for the DOC, prosecutors say. Bethea was the recipient of $150,000 that should have gone in the public coffers, according to court papers.  The crew went on shopping sprees, spending $44,000 on camera equipment, Gucci products and Apple computers, investigators believe. Sangster also treated himself to a New Year’s Eve weekend in Las Vegas. He declined to comment.  Paul’s lawyer, Louis Rosenthal, said that his client trained others on the computer bookkeeping system and his password was available to many employees.  “Half a dozen people have his password and passcode,” he said. “It’s unthinkable that he would use his own code to cut forged checks.”  Darren Fields, the lawyer for Miller, said that his client has no association with the county office.  “She never worked for the public administrator, she never received funds from the public administrator,” he said. “She’s a victim of circumstance.”  jfisher@nydailynews.com

 

 

May 4, 2012

City Bookkeeper Charged With Stealing $2.6 Million From Estates

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By RUSS BUETTNER

A bookkeeper in the office of the Brooklyn public administrator stole more than $2.6 million from the estates of people who died without wills over a period of three years, prosecutors charged on Friday.

The bookkeeper, Richard Paul, wrote forged checks from seven estates, diverting money that was supposed to be deposited in the city treasury to himself and three co-conspirators, who were also charged, according to criminal complaints in the case and a prosecutor’s remarks in court.

All four defendants are charged with grand larceny; Mr. Paul, 34, is also charged with defrauding the government. They pleaded not guilty on Friday and are free on bail.

The money was rapidly withdrawn and spent using debit cards, including charging $4,500 at B&H Photo and purchases from Gucci and Apple, according to a memorandum by the city Department of Investigation. Transfers to other bank accounts, including one for $200,000, drained nearly all the proceeds of the forgeries, the memo says.

“This investigation exposed an audacious and calculated scheme to steal money from the dead,” Rose Gill Hearn, the commissioner of the department, said in a statement.

For decades, auditors and prosecutors have cited public administrator offices, which handle the estates of people who die without wills or known heirs, for corruption or incompetence. Questions about the handling of funds and real estate and the selection and billings by lawyers appointed to oversee the estates have been the source of recurring problems.

Most recently, Lee L. Holzman, the Bronx surrogate court judge since 1988, is facing a disciplinary hearing this year on charges that he allowed the public administrator whom he oversaw to run amok, taking unearned and excessive fees from estates she was handling.

In 2009, an audit of the Brooklyn public administrator’s office by William C. Thompson Jr., who was the city comptroller, found mismanagement so pervasive that Mr. Thompson urged people to rush to create wills.

Each borough has a public administrator, who sells deceased people’s property, pays their debts and looks for heirs. If no heirs are found, the estate’s proceeds are sent to the city Finance Department.

The scope of the office’s work was not readily available Friday, but Mr. Thompson’s audit said the Brooklyn public administrator’s office had closed 523 estates in 2008. It was not clear whether any heirs were cheated out of money because of the scheme described by prosecutors, but none had been found when the money was alleged to have been taken.

The current Brooklyn public administrator, Bruce L. Stein, took office after the issues raised in the Thompson audit occurred. Last November, Mr. Stein noticed that a check for about $650,000 bearing his name had been forged and reported it to Ms. Gill Hearn’s office, according to the Department of Investigation memo. Investigators then discovered that the check was deposited into an account at a Manhattan branch of TD Bank.

City investigators, working with the office of the Manhattan district attorney, Cyrus R. Vance Jr., eventually discovered six earlier forgeries going as far back as August 2008.

“By breaching the public trust in order to line his pockets, the defendant violated his obligations to the city and to all New Yorkers,” Mr. Vance said of Mr. Paul.

Taryn Miller, 33, is accused of helping Mr. Paul run the scheme, and her husband, George Bethea, 34, is accused of receiving $150,000 of stolen money.

Another city employee, Ransel Sangster, 35, is accused of receiving two forged checks — one for $390,287.41 in August 2008 and another for $200,000 in November 2011 — while he was working for the Department of Homeless Services and as a corrections officer for the Department of Correction. Mr. Sangster was fired as a correction officer after his arrest and reverted back to his Civil Service job at Homeless Services, from which he is currently suspended, according to the Department of Investigation.

Mr. Paul and Ms. Miller each face maximum sentences of up to 25 years if convicted of the top charges against them. Mr. Bethea and Mr. Sangster face up to 15 years on their top counts.

Mr. Paul’s lawyer, Louis R. Rosenthal, said outside the courtroom that his client had shared his user name and password with people he trained to use the computer program in the office that prints checks. Mr. Rosenthal suggested others might have been responsible for the forgeries.

“It’s incomprehensible that he would have used his own pass code to write a forged check,” Mr. Rosenthal said.