An auditor involved in the development of Palisades Credit Union Park, home of the Rockland Boulders (independent; Can-Am League) has been handed a sizable penalty.
In an announcement issued on Monday, the U.S. Securities and Exchange Commission (SEC) revealed that it had handed fines to PFK O’Conner Davies and Domenick F. Consolo for issuing fraudulent audit reports relating to the municipal bonds used to pay for the ballpark. The agency contends that the auditor acted negligibly in overview of Ramapo, NY‘s finances.
“The SEC’s order finds that PKF O’Connor Davies and Domenick F. Consolo allowed Ramapo to record a $3.08 million receivable in its general fund for a property sale that Consolo knew had not occurred,” the agency said in a statement issued on Monday. “Consolo also ignored red flags and relied upon what turned out to be false representations by Ramapo officials about certain other receivables, interfund transfers, and liabilities. PKF O’Connor Davies failed to take appropriate steps to mitigate the risk of material misstatements even after senior management became aware that Ramapo’s financial statements were the subject of multiple law enforcement investigations and Consolo received complaints about possible fraud.”
As a result of the SEC’s findings and subsequent settlement, PFK O’Connor Davies will pay $380,000 in audit fees and interest, which comes on top of a $100,000 fine. Consolo, meanwhile, will be fined $75,000 and has received a suspension from public company accounting. As part of that penalty, he cannot be involved in a municipal audit as an engagement partner or an engagement quality control reviewer for another five years.
Though both parties accepted their penalties, PFK O’Connor Davies and Consolo defended their work in a press statement. More from Lohud.com:
“We stand by the integrity of our work with the town of Ramapo,” the statement says. “We feel strongly that a continued back and forth with regulators would only expend valuable firm resources and divert focus from our ongoing business and growth goals. We’re confident what we learned through this process will provide valuable insights that will benefit our municipal clients moving forward.”
The SEC’s order found that PKF O’Connor Davies and Consolo allowed Ramapo to record a $3.08 million receivable in its general fund for a property sale that Consolo knew had not occurred.
Consolo also ignored red flags and relied upon what turned out to be false representations by Ramapo officials about certain other receivables, interfund transfers, and liabilities, the SEC said.
PKF O’Connor Davies also failed to take appropriate steps to mitigate the risk of material misstatements even after senior management became aware that Ramapo’s financial statements were the subject of multiple law enforcement investigations and Consolo received complaints about possible fraud.
In April U.S. Attorney Preet Bharara filed charges against town supervisor Christoper St. Lawrence and Andrew Troodler, director of the nonprofit Ramapo Local Development Corporation. The indictment contended that they misstated the city’s financial state, as it well as its ability to repay the bonds. Their trial is currently slated place in January.
Palisades Credit Union Park opened as Provident Bank Park in 2011. It should be noted that the Boulders are not a part of these proceedings.
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