• Three towns have severed ties with ex-treasurer's company
• Michael Klein resigned as treasurer as probe deepened

The town of Carmel wants to slash its 2016 fire-protection contract with the Mahopac Volunteer Fire Department by 32 percent as part of the fallout of a probe into up to $5 million of missing funds from the department.

Report: Mahopac VFD confirms probe for missing millions

In addition, a Journal News investigation has learned:

• Several municipalities have severed ties with Buckshollow Emergency Equipment Corp., a fire and police equipment supplier headed by the Mahopac department’s former treasurer, Michael Klein.

• Buckshollow has received close to $400,000 from eight municipalities and Westchester and Putnam counties since 2012 for uniforms, night scopes, ammunition, police-car equipment and other items.

• Carmel is seeking to revise its oversight of the fire department, though details of the new financial relationship are still under negotiation.

Read more: Mahopac VFD treasurer resigned as probe deepened

Statement: Mahopac VFD on possible embezzlement

“We need an overhaul,” said Carmel town Supervisor Kenneth Schmitt, a MVFD life member. “And we need to safeguard the taxpayers’ money that funds the department.”

The revelation about the missing money last month drew stunned responses from residents and officials as the fire department had been revered as a town mainstay. Tax Watch revealed that officials feared that as much as $5 million was missing in an alleged scam that took place over many years. Officials have declined to disclose how the loss occurred.

A state police investigation into the allegations of missing money continues, said Trooper Melissa McMorris, a department spokeswoman. A spokeswoman for Putnam County District Attorney Adam Levy declined comment.

The MVFD is among 93 volunteer departments in Westchester, Putnam and Rockland counties that provide fire services throughout the Lower Hudson Valley. There are no paid departments in Putnam and Rockland counties, while Westchester has five staffed by career firefighters and 14 that have both paid and volunteer members.

The Mahopac department, one of three that serves the town of Carmel, is a private non-profit organization that contracts with the town to provide fire and ambulance services. The department responded to 230 fires and 666 medical calls between January and September.  It serves about 5,500 of the town's 13,000 parcels while the other Carmel neighborhoods are served by the Mahopac Falls and Carmel fire departments.

Cuts proposed for MVFD

Critics have called for cuts in the MVFD's contract with the town.

The town supervisor responded with a proposal to slash the fire-protection contract by $550,000, which was unveiled at an early November budget hearing. In Schmitt’s original proposal, the $1.7 million contract would have grown by 2 percent. His latest proposal would cut it by 32 percent, to $1.2 million.

Schmitt said the funding would pay for the district's operating expenses but eliminate money to buy new equipment.

"If the money hadn't been allegedly misappropriated or embezzled, they would have had enough cash to buy new apparatus," he said.

Also in the balance is an additional $339,000 budgeted for the department to pay for workers compensation and the department’s length-of-service award program, which provides pension-like benefits to volunteers. A Town Board budget vote is set for Nov. 18.

At last week’s budget hearing, in which the $550,000 reduction was proposed, resident Michael Barile called for a substantial cut, based on what he had heard about the missing funds.

“If $5 million was taken over 10 years, it’s obvious the department didn’t need it,” he said.

He also called on the department to waive the $175-per-week fee it charges the town's seniors program to use the department meeting room.

Department spokesman Edward Scott said he was unaware of the Town Board’s budget-cutting intentions when contacted about just how much money was missing. But he said basing cuts for 2016 on these estimates was imprudent.

“They are speculating,” Scott said. “We don’t have a full accounting yet. I don’t believe they have the proper information to be making a proper decision.”

He said cutting the funding would disrupt the department's annual capital investments, which are needed to maintain the department’s three fire houses and 11 pieces of apparatus. The department spends between $400,000 to $500,000 a year on new equipment, he said, and planned to replace a 1992 tanker truck next year with a rig costing $750,000.

“The cost of fire apparatus is amazingly high,” he said.

Calls to the department’s accountant, Joel Rosenberg, of RRC Price CPAs of Bardonia, were not returned. Rosenberg has served as the department’s accountant since at least 2003, during the time that Klein served as treasurer.

FD won't release documents 

Klein resigned as treasurer on Sept. 25 as the probe deepened. Scott declined to comment on whether Rosenberg still served as the department’s accountant.

The department over the past several years has done business with its treasurer’s company. It has refused to provide copies of invoices from Buckshollow Emergency Equipment, which Tax Watch requested in mid-October under the state Freedom of Information Law.

The department rejected the request, citing an exemption in the law that protects documents compiled for law enforcement purposes that would interfere with an investigation if made public, or reveal confidential information relating to a criminal investigation.

Tax Watch appealed the denial to the department’s attorney, Frank Simeone of Suffern, described by Scott — who also serves as the MVFD's records-access officer — as its appeals officer. Ten days later, when a decision on the appeal was due under state law, Simeone said he was not the appeals officer, and did not know who was.

"You can't file an appeal with someone who isn't the appeals officer," Simeone said Monday. "I don’t think it serves anyone to make the records public. Besides, we don’t have them. We’ve turned them over to the district attorney. We should have kept copies."

The department's actions appear to flout the state Freedom of Information Law, said Robert Freeman, executive director of the state Committee on Open Government.

"It appears to be a deliberate attempt to mislead," he said.

Scott, on Wednesday afternoon, said the fire commissioners appointed Simeone as their appeals officer on Monday night. But he said the attorney was on vacation for a week and unavailable for comment.

"He's taking some family time," Scott said.

News of the county and state investigation has sparked action by local governments that have done business with Buckshollow in recent years. The towns of Carmel, Bedford and Somers have severed their ties with the equipment supplier.

Only the town of New Castle, which has spent $1,959 with Buckshollow this year, has continued to work with the company, Tax Watch has found. The town has spent about $15,000 with the company since 2009, said Town Administrator Jill Shapiro.

“We haven’t severed ties,” said Shapiro. “But we are going to talk to our legal counsel about it.”

What they bought 

Carmel's purchases included $439 for eight nickel-plated badges; $3,100 for 31 holsters with lights; $7,980 for 30 weapon lights; $1,260 for 21 pairs of gloves; and $2,160 for ammunition and 200 cardboard targets.

Neither Westchester nor Putnam County has a current contract with Buckshollow.

The company had been an authorized seller of law-enforcement body armor, under a state bid that was open to municipalities. That bid expired on Oct. 1, said Alex Mazzotta, Putnam County’s purchasing director.

“Buckshollow wasn’t a re-seller on the new bid, so we can’t make a purchase going forward,” he said.

Since 2012, Buckshollow’s biggest municipal customer in the Lower Hudson Valley was the town of Carmel, with purchases of about $109,000.

Others using Buckshollow as a vendor since 2012 were Westchester County (about $75,000); the city of White Plains (about $67,000); and the town of Bedford (about $62,000).

Buckshollow, located on Secor Road in Putnam Valley, which was shuttered from Oct. 24 to Nov. 6, reopened Saturday. Dominic Mignogno of Mohegan Lake arrived at 10 that morning to buy a Sog pocketknife. He was also shopping for a rifle to use at Westchester County's Blue Mountain Sportsman Center in Cortlandt.

"They have great service, and good products," he said. "And if they don't have it, they can get it."

Inside the shop, rolls of yellow police crime-scene tape were stacked in one corner, while rifles hung from a wall above a glassed-in display case with pistols priced at up to $1,400. Police body armor, dress jackets, winter coats and trousers were on racks in another room which had hats emblazoned with insignia from New Castle, Bedford, Carmel and Briarcliff Manor. Shirts had embroidered insignia from public-safety agencies in Putnam County, Ardsley and Pleasantville.