Three Former Orange County IDA Officials Repay More than $1.2 Million, Receive No Jail Time

GOSHEN—Three former officials with the Orange County Industrial Development Agency paid nearly $1.27 million in restitution to the agency as part of plea agreements that afforded them no jail time for their acts of corruption.

Vincent Cozzolino, Laurie Villasuso and Edward Diana were sentenced on Friday before Judge Robert Prisco in Orange County Court. Cozzolino, former IDA Managing Director, Villasuso, former IDA Chief Executive Officer and IDA Board Member Diana pled guilty to criminal charges brought by the Orange County District Attorney based on a probe conducted in conjunction with the New York State Attorney General’s Office and the New Windsor Police Department.

In connection with the sentencing of the three former IDA officials, New York State Comptroller Thomas DiNapoli and Orange County District Attorney David Hoovler released a report that detailed the defendants’ crimes and how what they termed were systemic failures and neglect of duty by the IDA board and its officials that enabled their scheme.

Cozzolino was sentenced to five years probation and paid $1 million in restitution for his conviction of Corrupting the Government in the third degree, a class D felony. Villasuso paid $175,000 in restitution for her conviction of Corrupting the Government in the fourth degree, a class E felony. Diana was sentenced upon his conviction of two counts of Offering a False Instrument for Filing in the Second Degree and one count of Engaging Prohibited Conflict of Interest, both class A misdemeanors. The former Orange County Executive paid full restitution of $90,000.

“As important as it is to prosecute those who committed crimes at the IDA, it is equally important that safeguards be put in place to ensure that public monies are not squandered in the future,” said Orange County District Attorney Hoovler. “I thank State Comptroller DiNapoli for all the work his office did in this investigation, and for working with us on this report. I hope this report will be used not only as a record of the lax oversight that existed at the Orange County IDA, but as a roadmap as to how procedures can be strengthened at the Orange County IDA and at IDAs and similar institutions throughout New York State.”

“Cozzolino, Villasuso and Diana betrayed their duty to the public in order to enrich themselves through a web of conflicts of interest, false statements and pay-offs,” said DiNapoli. “Making matters worse, their scheme was enabled by a complacent board, which neglected its fiduciary duty and allowed Cozzolino to assume near unfettered control of the program. It is because of the joint work of our partnership with Orange County District Attorney Hoovler and the New Windsor Police that we were able to bring their crimes to light and recover over $1 million.”

The investigation revealed that Cozzolino entered into a series of contracts that were funneled through his company, Galileo Technology Group with the IDA with vague and seemingly overlapping responsibilities affording him complete control of the Accelerator Program. The District Attorney and State Comptroller also reported that to further cement his power and despite conflicts of interest, former CEO Villasuso and former board member and Accelerator Committee Chair Edward Diana, were “hired” by Cozzolino’s private company, which received millions in payment from the IDA. The investigation found that GTG was paid just over $2.5 million from the Accelerator Program; of which $1 million was paid to Cozzolino from GTG, the joint Orange County DA-New York State Comptroller report stated.

In addition, Cozzolino was the founder and a board member of The Strategic Economic Consortium and Executive Vice President at CERES Technologies, Inc. He used his power at the Orange County IDA to benefit both companies, the report noted. In particular, TSEC was awarded Orange County IDA contracts and provided rent-free space by the Orange County IDA. CERES, clearly not an upstart business in Orange County, was also afforded entry into the Accelerator Program and reduced rent.

Villasuso and Diana were the two IDA officials primarily charged with overseeing the Accelerator program. Diana admitted to receiving $90,000 in payments from Cozzolino’s firm for merely attending 20 meetings and “a couple” of phone calls.

The investigation also found that the IDA’s board abdicated its fiduciary duty and acted as a mere rubber stamp for Cozzolino which he exploited for his personal gain and the enrichment of his co-conspirators. The IDA board failed to review contracts, invoices or engage in any meaningful oversight which may have exposed the malfeasance, they noted.

District Attorney Hoovler and State Comptroller DiNapoli were very critical of the Orange County IDA Board’s oversight of Cozzolino. noting, “During GTG/Cozzolino’s reign, the Orange County IDA Board members were admittedly lax in their oversight and blindly deferred to Cozzolino. Indeed, Diana in his interviews with the investigative team confessed, ‘we were an absentee board.’”

The joint report issued the following recommendations to be considered by the newly constituted IDA Board of Directors:

• The Board should review and approve all contracts;

• The Board should receive and review a detailed list of all invoices, with a detailed list for Board approval;

• The Board should be provided with and review all committee meeting minutes;

• The Board should be provided with and review all leases and subleases;

• The CFO should review and approve all invoices;

• Duties should be separated between preparation, payment, and oversight of all vouchers and invoices; and

• All job creation numbers with regards to the Accelerator Program should be verified by an independent source.

The Orange County Legislature in late August launched its own investigation into the Orange County IDA, according to Mid-Hudson News. In addition, the Orange County IDA has stated that it may be considered actions of its own against former officials of the agency.