| NEW YORK, April 19
NEW YORK, April 19 An elected official of a New
York City suburb faces trial on Wednesday in what authorities
have called the first criminal securities fraud case involving
Christopher St. Lawrence, the elected supervisor of Ramapo,
New York, has been charged with securities fraud, wire fraud and
conspiracy. Prosecutors say he defrauded investors who helped
finance a controversial minor league baseball stadium.
Jury selection is set to begin before U.S. District Judge
Cathy Seibel in White Plains, New York federal court on
New York federal prosecutors charged St. Lawrence in April
2016 along with Aaron Troodler, former executive director of the
town-owned Ramapo Local Development Corp. Troodler pleaded
guilty last month under an agreement with prosecutors.
The case followed U.S. regulators' push in recent years to
bring civil actions those accused of misconduct in the $3.7
trillion U.S. municipal bond market.
Prosecutors said Ramapo and the development corporation sold
more than $150 million of bonds while Troodler and St. Lawrence
concealed the town's deteriorating finances.
The town's financial woes were largely due to a $58 million
minor league ballpark project, prosecutors said. The park,
originally called Provident Bank Park and now Palisades Credit
Union Park, is home to the Rockland Boulders.
Ramapo residents rejected a plan to guarantee bonds used to
finance the park in a 2010 referendum, and St. Lawrence told
residents that no public money would be used to pay for the
project. But Ramapo ended up paying more than half the cost,
according to prosecutors.
St. Lawrence and Troodler falsified the town's finances to
help sell the bonds, including by putting millions in fake
receivables on its books, prosecutors said.
St. Lawrence is also facing civil claims by the U.S.
Securities and Exchange Commission.
In May 2016, after the charges were filed, Moody’s Investors
Service downgraded the town’s outstanding bonds two notches to
A3, still in the investment grade category. In February, Moody’s
withdrew its rating altogether because the town did not file
audited financial statements.
The town, which is 28 miles northwest of New York City and
had 126,595 residents as of the 2010 census, has said it
significantly reduced its debt and cut its exposure to the
development corporation by 62 percent as of Dec. 31.
Nonetheless, some of Ramapo’s general obligation bonds have
dropped in price this year in a few small trades.
(Reporting By Brendan Pierson in New York; Additional reporting
by Hilary Russ in New ; Editing by Dan Grebler)