Good morning everyone.
My name is Preet Bharara and I'm the United States Attorney for the Southern District 
of New York. Toady we announce criminal charges against Christopher
St. Lawrence, the Supervisor of the Town of Ramapo, which is equivalent 
to the mayor of the town, and Aaron Troodler, the former Executive Director
of the Ramapo Local Development Cooperation, or the RLDC.
The charges against St. Lawrence and Troodler arise
out of a year's long scheme to lie - repeatedly and brazenly - about
the Town of Ramapo's financial health, while raising over
150 million dollars in municipal bonds.
We brought these charges because whether you are a publically listed company, 
or a municipality, whether you run a corporation, or you lead
a town, you are not allowed to cook the books;
plain and simple. And if you do cook your books, and you issue securities
to people who rely on those false books, then you have committed 
federal securities fraud. And that is what we allege today
against St. Lawrence and Troodler. To our knowledge, 
this is the first criminal securities fraud case brought against city
officials for accounting fraud in connection with the sale of municipal bonds.
But I suspect that it will not be the last.
The significance of the municipal bond market cannot be overstated.
The U.S. muni bond market exceeds $3.7 trillion 
dollars. Cities, counties, and states around the country
rely every day on municipal bonds to help build schools, hospitals
highways, and so much more. And investors around the 
world put their hard-earned money into the perceived 
relative security of these bonds. Investors in the
bonds issued by Ramapo and RLDC include not just institutional
investors by the way, but retirees from New York, New Jersey, 
Florida and Pennsylvania. These are people - some of them 
in their 80s - who put their savings into these bonds. 
There is no place in this market for fraud and manipulation, and 
there should be no tolerance for it. Unfortunately, for
many years, as the indictment alleges in some detail, the bonds
issued by the Town of Ramapo and the RLDC were built on a foundation
of fraud. As specifically alleged, St. Lawrence and 
Troodler lied repeatedly about the town's finances, deceiving
both the citizens of Ramapo, as well as thousands of bond
investors. This is, by the way, especially troubling because 
according to the State Comptroller, Ramapo is one of the most fiscally 
stressed towns in all of New York. It was actually number one in the
entire state in 2012 when the Comptroller's Office began
running its stress tests. So Ramapo can ill afford 
a scandal like this. At the heart of the fraud
was the financing of a 4,500 seat minor league baseball stadium that
St. Lawrence wanted built in Ramapo; Rose - Provident Bank
Park. The problem was that even though St. Lawrence wanted this
stadium - as we allege - the people of Ramapo did not.
There were other more pressing needs than a shiny new sports stadium.
In fact, as also described, 70% of 
the town's voters rejected the stadium in a referendum in 2012 - uh, 2011
to guarantee long term bonds to pay for its construction.
So the defendant allegedly found a way to issue bonds in an end-run around
those voters. As alleged, while assuring the public 
that no town money would be used for building the stadium, St. Lawrence 
and Troodler - through lies and accounting manipulations - found a way
for the Town to fund more than half of the $58 million dollars it cost 
to build that stadium. As further alleged in the indictment,
the defendants then filled the big hole opened up by these costs in the Town's 
General Fund with a series of fake accounting entries. And these are 
listed, uh, in part in the chart to my left. In 2011,
for example, as noted on the chart, they allegedly made up a fake $3.6 million
dollar receivable for that General Fund, um, as noted in item 2
From 2010 to 2015, St. Lawrence also allegedly inflated the 
General Fund with another $3 million some odd, uh, dollar amount
fake receivable based on an agreement, uh, to buy a property known as 
"The Hamlets" from the Town for I think $3.08 million dollars. 
The sale did not go through. Why? Because it turns
out that the land, uh, turned out to be a habitat for rattlesnakes 
so it couldn't be sold. But as we allege, that did not stop St. Lawrence. 
He just falsely kept that as an asset on the Town's books
for a number of years. Um, item 4 you'll see there's another alleged
uh, false receivable for $3.14 - 5 million dollars, and 
in item 5 shows, uh, from the indictment, a $12 million dollar 
uh, false balance as well. In fact,
 - uh, as the indictment describes - the trickery got so bad that after telling 
a bond rating service in a call in January 2012 - uh, 2013 
that the fund balance had remained unchanged, uh, the prior year,
St. Lawrence told his employees to complete an upcoming debt refinancing " as
fast as possible because..." - in his own recorded words - "
we're gonna have to all be magicians to get
some of those numbers". So the 
accounting fraud - as described - allowed the defendants to show a strong operating balance 
when the bonds were issued, even though in reality, the
Town was operating at a deficit. In other words, the Town was in the red,
not in the black as the cook books were showing.
And as a direct result of the defendants' alleged fraud, an already 
stressed and struggling town will end up being harmed even more.
The Town of Ramapo will have to assume more debt, has
had to raise taxes to pay for that added debt, will face higher 
costs of funding in the market and is forced to operate a stadium 
that is losing money, thereby creating a vicious cycle 
of hardship imposed on the town and its citizens by the defendants' alleged 
securities fraud, as laid out in a lot of detail in the complaint.
Not to mention the harm to the integrity of the markets,
and to people's faith in their elected leaders. 
As you'll see, this is simply depicted very simply in the chart, uh, to my right.
That's a picture of the actual stadium that was built - uh,in large part - on
money from the bond offering. There were misrepresentations made - as alleged -
with respect to the assets, with respect to fund transfers,
uh, to the Ramapo General Funds - which is what investors look for, and look at 
to see what the relative health of (unintelligible) of the municipality is.
Those things also relied upon - by in part of investors who bought those bonds.
uh, based on false results.
Um, before I turn the podium over to our partners, I want to say a few
words of, of thanks to them. As you might imagine, for a landmark 
and groundbreaking case like this - the first of its kind, as I mentioned - the investigation
and prosecution is a result of a lot of hard work, and a lot of collaboration to connect
the dots and follow the money. Uh, I'm joined today by our partner in this and so many 
of the cases that we bring out of this Office, the FBI, uh, 
led remarkably well by Diego Rodriguez, uh, who is the Assistant Director
in Charge of the FBI New York Field Office. I want to thank Diego
and his team - specifically FBI Special Agent Bill McGrogan - for their incredibly hard work 
and assistance in this investigation. I'm also joined by Andrew Ceresney, 
a friend and an alum of this Office, the Director of the SEC's Enforcement Division.
I want to thank him and the SEC for their work and collaboration. As you'll see
when he speaks, they did a lot of work, and have additional facts
uh, and additional enforcement authorities that he will talk about, and it's a testament to the work
of him and his team, uh, in bringing a case that is like this 
that's never been brought before. They, they really deserve a lot of credit. Um, also, this
case would have not been possible without the work and commitment of the District 
Attorney for Rockland County, Thomas Zugibe, whose investigators worked tirelessly and 
seamlessly with us in this investigation - so thank you, Tom. And Tom and I have done a lot of
things together - including things unrelated to securities fraud - and I'm very proud and thankful 
for the relationship and the collaboration with the folks from his Office, uh, and all the ways
that we can help serve Rockland County. Lastly, I wanna thank the career
prosecutors, uh, from my own Office. They are Jay McMahon and Andy Dember, 
the AUSAs handling the prosecutions, as well as their supervisors 
uh, Perry Carbone and Mimi Rocah, the Co-Chiefs of the White Plains Unit. 
So as you know, we do a lot of cases relating to public corruption out of this Office,
but public corruption can take many forms. They almost always 
involve a lack of transparency, a lack of accountability, 
and a lack of principle. Today's charges describe a form of corruption.
It is public corruption meets securities fraud. 
And so whether you are a State Legislator responsible for enacting laws,
or a municipal executive responsible for a town's finances,
you must be accountable. You have to be accountable to the public, and you 
have to be accountable to the truth. As today's indictment alleges, 
Christopher St. Lawrence and Aaron Troodler kicked truth and transparency
to the curb, selling over $150 million dollars of municipal
bond, uh, funds on fabricated financials. And in doing so,
they defrauded both the citizens of Ramapo, and thousands 
of municipal bond investors. And for that, they will now be held to account.
Their innocent until proven guilty, and we will have the opportunity now to prove those
charges in a court of law. Uh, and now let me call to the podium, uh, Diego
Rodriguez, head of the FBI here in New York. (Diego) Thanks Preet.
Good morning everyone. In the spring
of 2010, Ramapo's town board wanted to build a minor league baseball stadium
backed by $16.5 million dollars in longterm 
bonds to be paid with tax dollars, but it was a 
swing and a miss. Nearly 70% of the votes cast by the public were against 
public funding of this project. After the initial
resolution was overwhelmingly rejected, Christopher St. Lawrence 
the Town's supervisor, was ready to play ball.
He assured people this venture would be privately funded. More
than half of the project was allegedly financed on behalf of the Town, and the
taxpayers who voiced their opinion at the, uh,
general vote didn't know. The Ramapo Local Development
Corporation - or the RLDC - was the not for profit corporation
tasked with the development initiatives in Ramapo, which allowed them to
issue the bonds to the public. St. Lawrence served on the RLDC
as Board of Directors, and also as their President. 
And Aaron Troodler, an Assistant Town Attorney for the Town of Ramapo, served
as their Executive Director. St. Lawrence and Troodler 
allegedly engaged in a complex securities fraud scheme so they could hide
the public funds being used for the stadium and other projects.
The illegal activity allegedly continued even 
after the players became aware the Town and the RLDC
were subjects of a federal investigation.
Public corruption poses a fundamental threat to our way of life.
Wasting billions of your your tax dollar - uh, 
paid dollars every year, investigating public corruption remains among the FBI's
top, uh, priorities. We're singularly situated 
to combat this type of corruption with the skills and capabilities to
run complex operations. As always, our success is
due in large part to the cooperation we receive from our Federal, State, and
local law enforcement agencies. We'd like to thank our
partners from the Southern District of New York, U.S. Attorney Preet Bharara, 
Perry Carbone, Co-Chief of the White Plains Division, and the Assistant 
United States Attorneys in charge of the prosecution, Andrew Dember and 
Jay McMahon. Many thanks to Rockland County District Attorney 
Thomas Zugibe, and the task force detectives who worked
this case with us. We'd also like to recognize the outstanding work
of the Securities and Exchange Commission under the leadership of Director Andrew Ceresney
from their enforcement, uh, division, for their exceptional contribution
and support throughout this investigation. And last but not least, 
I'd like to extend my sincere congratulations to FBI Supervisory Special Agent 
Brian O'Rourke and his team for their work on this investigation.
Thank you very much.
(Preet) Thank you Diego. Now let me call to the podium, Andrew Ceresney, uh, Director of 
Enforcement of the SEC. (Andrew) Thanks very much Preet.
And, uh, Preet and Diego have already outlined the contours of the overall scheme, which
we uncovered through our parallel investigations. So, let me just focus on the aspects of the 
case that are unique to the SEC. Let me start by saying that - as you undoubtedly know, 
and as Preet talked about - the SEC has a keen interest in the 
accuracy and transparency in filings by municipal issuers. 
The $3.7 trillion dollar market for municipal securities is critically
important to building and maintaining our nation's infrastructure,
and for financing important public projects. Individuals, or retail investors, 
directly or indirectly hold more than 75%
of the outstanding principal amount of municipal securities.
And many such investors held the Ramapo offerings. 
So it is essential for this market to function with integrity, and we have - in recent years - been
very focused on bringing cases where municipal issuers have misled investors. 
Today, we also charge Christopher St. Lawrence and Aaron Troodler
for their roles in this fraud, which we allege included accounting gimmicks
designed to inflate the General Fund, as well as misstatements concerning revenues 
from the Ramapo Local Development Corps projects, including 
the minor league baseball staduim - all of which misled investors.
I put up a chart here, which shows 
misleading statements that were made in connection with the General Fund balances.
The top line is what was represented to investors as the balance.
And as you can see, that line is very stable. But the actual reality
- this is the red line on the bottom - shows the balance decreasing
over time so that by FY 14,
it was over $14 million dollars in the red.
And the difference is very stark.
We've also charged in this case Michael Klein and Nathan Oberman,
as well as the Town of Ramapo, and the Ramapo Local Development Corporation.
Klien is the Town Attorney for the Town of Ramapo,
and the case against him relates principally to his role in conceding - 
concealing the fraudulent nature of approximately $3 million dollar receivable 
that the Town kept on the books of its General Fund, which was of primary importance
to investors for 5 years - from 2009 to 2013.
Without that fraudulent receivable, the Town's General Fund would have been
negative in most of the years. We allege that Klein provided the Town's 
auditors with insurances that this receivable was collectable,
despite knowing - or recklessly disregarding - that the payment would not be forthcoming.
on the time tables represented. In fact, in 2013,
we allege that Klein privately acknowledged to a colleague that his representations
to the auditors "pushed a gray area too far".
Oberman is the Deputy Finance
Director and the receiver of taxes for the Town of Ramapo. Our case against 
Mr. Oberman relates in substantial part to his role in directing improper
transfers totalling in excess of $12 million dollars from the
Ambulance Fund to the General Fund, essentially starting in
2009. We allege that Oberman and St. Lawrence used the Ambulance Fund
- which had a different tax base than the General Fund - as a slush
fund to artificially inflate the balance of the General Fund.
We also in this case have channeled - charged the Town of Ramapo and the RLDC
with violations. Among other things, we're seeking several layers of
protection for investors in Ramapo municipal offerings for the next 5 
years. First, we are a seeking a court appointed monitor to review
the offering procedures, recommend improvements and monitor mandated compliance with
those recommendations. Second, we're seeking the appointment of an independent 
audit firm acceptable to the commission's staff to conduct audits of Ramapo's
financial statements. Third, we're seeking an order prohibiting the Town
and the RLDC from offering new bonds until they retain
and cooperate with an independent dis - disclosure council acceptable to the
commission's staff, whose role would be to make recommendations to ensure that 
the future offering documents are complete and accurate. All
of these measures are aimed to ensure that investors are protected going
forward. Finally, I wanted to add 2 additional things. First,
I'd like to thank Preet for his and his Office's hard work and cooperation
as we worked in parallel on these investigations. I'm proud of the strong relationship
we have with the Southern District, of which - as Preet mentioned - 
I am an alumnus. And also, would like to acknowledge the Assistant of the Rockland 
County District Attorney's Office, and the FBI. This case is an outgrowth of our 
recent efforts to work with public corruption prosecutors and investigators,
in addition to our historical work with securities and economics
crimes units of the U.S. Attorney's Office, and with securities fraud units
of the FBI, on cases that touch the public finance sector. 
Second, I'd like to recognize the SEC's staff who worked on this case. This 
case was a joint effort of the New York Reg - New York Regional Office
and the Public Finance Abuse Unit - one of our specialized enforcement units,
which was previously known as the Municipal Securities and Public Pensions Unit.
We renamed this unit recently to call it the Public Finance Abuse Unit to recognize
its broader scope and role. The staff that handle this matter
included Daniel Loss, Grayton Papier, Celeste Chase, 
Alice - Alexander Vasilescu, Louis Randazzo, 
John Wilcox, and Mark Zainer. LeeAnn Gaunt, the Chief of our Public Finance Abuse Unit, 
and Sanjay Radhwa, the Senior Associate Director of the New York Office, 
supervised the investigation. I could not be more proud of the staff efforts 
on this investigation. Thank you.
(Preet) Thanks Andrew. Now we'll here from the great Rockland County DA, Tom Zugibe.
(Thomas) Good morning everyone.
Let me also start by expressing my sincere and
gratitude for our partners. Um, U.S. Attorney Preet Bharara, and his
entire team, FBI Assistant Director in Charge, Diego Rodriguez
and his team, and Andrew Ceresney, Director of the SEC
Enforcement Division. There are no better partners. The
criminal charges just announced by U.S. Attorney Bharara advance our ongoing battle
against public corruption, and are the direct result of the continuing work of our
public corruption task force. At its core, the task force is a force
multiplier for Rockland County. It is a true collaboration between
my Office, the FBI, and the United States Attorney, using the 
tolls, the laws, and the resources of both State and Federal government
to attack an epidemic of greed, dishonesty, and abusive 
power that continues to infect our political system at every level of government.
By working collaboratively, we bring to bare all of our
collective power and authority, to investigate and explore criminal
activity by public officials - leaders who believe state and federal
laws simply do not apply to them. In today's indictment is a
prime example of such hubris. As a
Town Supervisor, Christopher St. Lawrence took an oath to honestly and faithfully 
serve his residence. But instead, it's alleged that this public
servant shamelessly exploited his position for a personal agenda.
- according to the indictment - by deliberately misrepresenting 
the finances of the Town for the purpose of securing a loan.
Supervisor St. Lawrence placed the taxpayers in jeopardy, and he defrauded investors.
If a regular homeowner
engaged in such conduct, it would be called mortgage fraud. Public officials,
whether elected or appointed, are more than mere employees. They are
servants of the public interest, and we must insist on absolute honesty,
integrity, and trustworthiness from every one of them.
Public corruption advances a selfish interest of a dishonest few over
the interests of the great many who work hard and who obey
the law. While I believe that the overwhelming majority of our public 
officials serve honorably, those who corrupt the operations of government
rob their communities, their friends and their neighbors, of the 
fundamental right to honest government. Simply put, the people
must be able to place their trust in their public servants at every level of government.
I am pleased to continue our long standing partnership
with the United States Attorney's Office, and the FBI, as we work together
to combat this pernicious problem. We will see to it that the crimes
involving public corruption, waste, fraud and abuse, are prosecuted
to the fullest extent of the law. Thank you all very much.
(Preet) Uh, thanks Tom.
Uh, happy for - for questions. (Aside) Um,
(unintelligible) situation back in 2012
and 13, on the Comptroller and Ambulance issue. 
(unintelligible) some queries and questions about Ramapo's finances. I don't know who wants to 
take it on. Is there any - I understand that there's limited resources and priorities
and all that kind of stuff. Is there any, um, simple explanation 
in their stories as to why there was, uh, premiere lax
between these problems being flagged, and, and - (Preet) It's, it's a
complicated case that involved - like a lot of cases that we do out of this Office. Um,
the nature of its complexity is maybe evidenced by the fact that no one has ever brought a case
like this before, ever, as we're - as far as we know - in the country.
Um, and it takes time to connect the dots, and figure out where the money went, and figure 
out what the misrepresentations were. Uh, and for SEC staff working in parallel with us,
and the FBI, and the Rockland County DA's Office, to investigate thoroughly
and completely, and comprehensively. And even still, uh, I should say the investigation
is ongoing - so it's not even done yet. It's a complex investigation. It has a lot of moving
parts. And we bring cases as aggressively and quickly as we can, consistent with
making sure we're doing the right thing, and we have all the facts that we need to have. Yeah.
(Aside) (unintelligible)? (Preet) They're, they're - 
that's not alleged. No. Yeah. (Aside) Um, 
(unintelligible) and lack of funds. What type of (unintelligible) did they trade
from the SEC, and what are you doing about that?
(Andrew) Um, our action against them seeks
penalties, um, as well as conduct based injunctions. Um,
and so, um, we would, we would seek that, as well as a general injunction.
(Aside) (inaudible)? (Andrew) Uh, our, our penalties are governed by a statutory structure. 
um, tiered penalties, depending upon the level of
activity, and whether there's fraud involved, and whether there's harm to investors. Uh,
you know, we can provide you with statutory references, uh, for that, but 
it depends on the number of violations that are found, and there are maximums that can be 
reached for that. (Aside) (unintelligible) to, uh,
(unintelligible)? (Preet) I, I never, I never commented who in particular we're
looking at. I did say - as I sometimes say, I don't always say - uh, that the nvestigation
is ongoing, and we're gonna continue to follow the facts. Yeah. (Aside) Sir, uh, the
information is that Mr. St. Lawrence not only served as the Town's Supervisor, 
but was also the Town Finance Director. Would you consider that a
best practice for a municipality, and did it in any way facilitate the alleged
fraud? (Preet) I'm not gonna comment on best practices from municipalities. Obviously, 
given the charges here, there are a lot of, uh, best, or even moderate practices, 
that weren't followed, and I'll leave it at that. Yeah. Yeah, you! 
(Aside) Um, you said that this is that, you know, as far as you know, the first of its kind 
in terms of municipal bond fraud in logging public officials. 
(unintelligible) is pointing maybe more focus on this going forward? (Preet)
Yeah. Look, at any time, um, the Office uncovers
- working with our partners - a type of corruption or a type of fraud, you
ask yourselves the question, um, does it happen elsewhere? And I think Andrew
has already pointed out that, that they have had the foresight in a lot of places to start 
working with public corruption units of U.S. - U.S. Attorney's Offices around the country. 
So it stands to reason that when you develop some understanding and expertise of a particular
kind of crime taking place, and you have a $3.7 trillion dollar
uh, market, that you take a look at other places where red flags are raised.
I'm not gonna talk about any particular things we're looking at, but I think you can expect our
Office, and based on what the SEC has said, um, and be, be happy with the fact that 
people are gonna be looking at these things more than you've seen in the past.
(Aside) Preet, can you tell us, um, the inception of the (unintelligible) case? 
Was it postponed by the SEC, or did SEC
(unintelligible)? (Preet) Yeah. I mean, we were working in parallel. I, I believe it's that we
had a whistleblower - um, which I think is public - uh, and, and that got the ball rolling in a
significant way. Yeah. (Aside) A quote from, uh, St. Lawrence
about their conditions, uh, did that come from a wire tap?
(Preet) I believe it wasn't a wire tap. It was, it was - I think it was a, it was a consensual recording.
(Aside) Thank you. (Preet) Yeah. (Aside) Hi. Um, where's (unintelligible) right now?
(Preet) Where's... (Aside) (unintelligible). (Preet) He's
- that's a separate case. I want to talk about this case, but he's awaiting transport to New York.
Last question. (Aside) Is there a Town Comptroller
there, and what's his (unintelligible) role in this?
(Preet) There, there was. (Aside) And what happened?
(Preet) Look, clearly a lot of things went wrong when you have 
a, a fraud that took place over a long period of time like it did here. 
It is also the case that it's not always possible to find a fraud when people are
clever about cooking the books, so I don't want to cast aspersions on anyone. But clearly 
there was a failure in a lot of different places, um, and we've alleged a criminal failure on
the part of 2 people, and the investigation continues. (Aside) Thanks a lot. (Preet) Thanks 
folks. 
