School financial problems

Audit Shows Widespread Fraud in Long Island School District
By BRUCE LAMBERT

Published: March 2, 2005


For eight years, top officials of an affluent Long Island school district systematically plundered taxpayer funds, illegally diverting at least $11.2 million to themselves, relatives and friends in an array of goods and services from a 65-cent bagel to a $1,800-a-night hotel suite to a mortgage on a luxury home in Florida, a new state audit says.


The case in Roslyn, N.Y., presents evidence of the most extensive such fraud ever encountered, national school experts say. It has already had repercussions in districts throughout New York, where school officials and bookkeepers say they are paying closer attention to budgets and accounts, and state auditors have stepped up their scrutiny.

The state audit report, entitled "Anatomy of a Scandal" and issued today by the New York State comptroller, Alan G. Hevesi, describes far deeper and wider corruption than previously disclosed. It said the audit found $3 million more fraud than had been estimated last spring, when the first allegations became public. It also documents and analyzes cases of fraud beyond what school officials and the local district attorney had previously detailed.

Criminal investigations have already led to grand larceny indictments of the former superintendent, the former business manager and a former clerk, all of whom have pleaded not guilty to the charges. Prosecutors said they were reviewing the latest findings and considering further charges.

But the audit also found 26 additional beneficiaries of schemes to divert money. The auditors cautioned that at least some of those beneficiaries may have been innocent recipients of largesse, but the report also hinted that the illicit benefits may have compromised district employees who might otherwise have blown the whistle.

That largesse was at the expense of taxpayers in Roslyn, a district of high academic achievement with 3,300 students on Long Island's North Shore. Officials have speculated that schemes to divert money went undetected for so long because of public satisfaction with school performance, with a 95 percent graduation rate and a healthy share of high school seniors sent off to Ivy League colleges every year.

But Roslyn's education came at a cost: School property taxes for homeowners there average $9,700 a year. In four years, the district's tax levy rose by 50 percent, to $69 million in 2004 from $46 million in 2000.

"Taxpayers are furious, and they have a right to be furious," said Mr. Hevesi at a news conference, hours before he was scheduled to make an unusual presentation of the audit to parents and other residents at the high school this evening. "We're going to clean this up," he said. "We're going to put the systems in to make sure this never happens again.

The top two culprits in named in the audit were the former superintendent, Frank A. Tassone, who was accused of taking in ill-gotten gains totaling $2.4 million, and his former assistant superintendent for business, Pamela Gluckin, who was accused of taking $4.6 million.

No item was too small or great or farfetched for the white-collar thievery, the auditors found. For example, they said, Ms. Gluckin used $935,000 to pay the mortgages on three homes. But she also charged for the flood insurance for her Hamptons house and her $989 water bill in Bellmore, as well $16,000 for pet supplies, and for jewelry, art, furniture and numerous other things.

Mr. Hevesi voiced amazement at "the diversity of the schemes devised." They included personal items billed to taxpayers, illegal raises and bonuses, fraudulent salary reports to the pension system that inflated retirement payments and more than $1 million in business contracts for friends and relatives with "no record that the district received anything of value in return," the report said.

It said taxpayers also paid for exotic trips to Thailand, Argentina, Morocco and Indonesia; $549,120 for food and catering, dry cleaning bills, $549,129 in illegal raises and bonuses and other benefits, a Rolex watch, cable television, $5,236 for Mr. Tassone's Christmas cards and overtime for a clerk to prepare them, $42,000 for his parking in Manhattan, 965 personal Federal Express deliveries, computers, a supersonic Concorde flight to London, Coach brand leather goods, $19.95 for vitamins, boat insurance, artworks, rugs, a $4,000 lunch for 40 at Rockefeller Center, furniture, a pool cleaner with remote control, business contracts for friends, Sony Playstations, a $3 latte, a BMW and a Jaguar, telephones in Colorado and Pennsylvania, and an unspecified $4,500 bill at the Mandalay Bay in Las Vegas.

Bills were paid to Tiffany, Tourneau, Bloomingdale's, Nordstrom's, Home Depot and other stores for personal purchases.

One startling disclosure in the state audit was that Mr. Tassone and Ms. Gluckin got the school district to pay not only for their personal credit card purchases but also more than $1 million in cash withdrawals from automatic teller machines.