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With Southold Justice Court theft audit in, town may delve deeper

03/22/2016 3:15 PM |

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About two years after the Town Board launched an audit into the Southold Town Justice Court’s handling of bail money, the independent auditors have returned their findings: more than $24,000 was unaccounted for in the court’s bail fund over just a three year period.

But whether the town should hire a forensic accountant to delve deeper into the findings remains up for debate.

The audit — which came in the wake of a bail theft scandal involving former court clerk Christine Stulsky who was arrested and charged with stealing more than $230,000 in bail money — went over the court’s records “with a fine-toothed comb,” said Supervisor Scott Russell.

A copy of the audits findings was not made immediately available, though it was discussed in public at a work session meeting Tuesday morning.

Albrecht, Viggiano, Zureck & Company auditor Rob Posner wouldn’t say the money was definitely missing, but that it was unaccounted for based on reviews of bail fund deposit tickets and bank records.

Current Justice Court director Leanne Reilly, who was hired by the town after Ms. Stulsky was arrested, is now going through the court’s records to try to locate any of the money, Mr. Posner said.

Mr. Posner said the courts previous records were a mess, making it difficult and time-consuming to link bail deposits with the cases to which they’re related.

“Leanne is now in the process of going back and reviewing these particular discrepancies to see if there’s really cash missing or whether it was put into a separate file,” he said. “Someone needs to go down and see if this cash is really missing.”

Mr. Posner said the cost of hiring an independent forensic account to look into the records would be “astronomical” because of the disorganization of the records, likely totaling more money than the audit found was undocumented between 2011 and 2014.

The money in the bail fund was under the authority of the court justices, Mr. Russell said adding taxpayers would not have to foot the bill to replenish the stolen funds.

Judge Rudolph Bruer — who opted not to seek re-election after 20 years on the bench and from whose bail fund Ms. Stulsky stole — would have been personally liable for the money, Mr. Russell said. An insurance company employed by the town covered the missing money while the town recoups its stolen funds through restitution payments made as part of a guilty plea deal by Ms. Stulsky.

Mr. Posner said previous audits of the justice court hadn’t looked into the bail fund itself, but had found problems with how the court dealt with incoming money and suggested ways for the justice court to improve.

The justices had been made aware of these findings on numerous occasions before the thefts were revealed, but Ms. Stulsky had promised she would take care of the issues, Mr. Posner said.

Meanwhile, the money continued to go missing, he said the audit’s findings show.

“The crime here is that Christine defrauded the people she was taking money from, she defrauded the justices and she defrauded the board,” he said. “It’s the justices’ responsibilities to make sure their employees are doing the right thing. No one here can force them to do it.”

Mr. Posner said suggestions made in previous audits that the court had ignored have since been implemented.

“Going forward, the record keeping is much improved,” he said. “The checks and balances are what you’ve recommended and then more.”

Mr. Russell said Judge Bill Price has been “very assertive” in making changes to the court.

“Him and Leanne have been working together to make sure this is brought to light, it’s done with and it’s improved,” he said. Mr. Russell and Town Board members Jill Doherty and Bob Ghosio said they felt it wouldn’t be prudent to spend more taxpayer money on the audits by hiring an outside firm.

“I don’t know that the public is really screaming out to know what the final result of the damage was,” Mr. Ghosio said, adding the board had “done enough to know what the problem was that it was substantial and that we’ve taken steps to correct it.”

But fellow board member James Dinizio Jr. said he wanted to see an “independent” review of the court’s records.

“We have to pay the price for what went on and ensure the numbers are correct,” he said. He said that having Ms. Reilly spend parts of her workday digging through records would distract her from her main purpose: to run the Southold Town Justice Court.

“Leanne has a job to do and it’s not [to be] a forensic accountant,” he said. “We hired her to run a justice court. Not every justice court has to go through what we went through.”

Mr. Russell said Mr. Dinizio could draft a bid resolution to hire someone to look into the court records if he felt strongly about the additional investigation. The final findings of AVZ’s audit, which has been officially halted, will be completed and made available to the town in about a week, Mr. Posner said.

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