Latest news with #MeridenHousingAuthority
Yahoo
23-02-2025
- Business
- Yahoo
Scandal wracks Groton Housing Authority
Groton — Why does a subsidiary of the Groton Housing Authority owe almost $100,000 in back taxes and fines on a blighted former nursing home property it bought on the other side of the state? Why did former director Robert Cappelletti take out a now-defaulted loan for $1.75 million of equipment that the bank that financed it can't find? And why are Cappelletti and former property housing authority Property Manager Jamie Lee involved in a web of limited liability companies, including one that allegedly spent $1.4 million to buy land in Massachusetts to build an apartment complex? These are just some of the many questions a law firm hired by the authority is now probing. The town has also said the authority is working with the FBI. On Friday, the housing authority sued Cappelletti and Lee, alleging they and possibly others are blocking access to authority computers, checking accounts and financial records while misusing its assets. The 28-page lawsuit details numerous allegations including defaulting on a loan by an authority affiliate, hiding equipment from a bank, using a limited liability company to transfer assets for Cappelletti's personal use or gain, buying two properties in Winchester, Conn., without telling the authority, faking a housing authority resolution and spending $1.4 million for land in Fitchburg, Mass. Emails and documents obtained by The Day through Freedom of Information Act requests show that town and authority officials are trying to wrap their arms around 'potential financial irregularities' involving some of the authority accounts that its Board of Commissioners say it learned of just last month. Town Manager John Burt has said the authority is investigating its finances and working with the FBI. In addition, authority board Chairman Robert Frink said in an email to Burt that a forensic investigation will start with records obtained from the authority offices. Frink said that when the authority became aware of potential financial irregularities involving some of its accounts last month, it suspended Cappelletti and placed Lee on paid leave, pending an investigation. The board also canceled an agreement with the Meriden Housing Authority, effective Feb. 11. The Meriden Housing Authority and Groton Housing Authority had shared Cappelletti as an executive director for the past nine years. The cancellation ended Cappelletti's employment by the Groton authority. Meriden Housing Authority board chairman Cornelius Ivers said Friday he has not been shown any evidence Cappelletti has done anything wrong. Ivers said Cappelletti remains the executive director of the Meriden Housing Authority, a position he has held for more than 15 years. He added Cappelletti has done a great job for us. The Meriden Housing Authority, along with its nonprofit arm, Maynard Road Corp., has also run into legal problems, as it's been sued over an unpaid loan. Lee was placed on paid administrative leave by the Groton authority on Jan. 19. Jim Loughlin, an attorney for Lee, said in a Jan. 28 email to the authority's attorney that he has not been provided with information about the investigation. Loughlin said Lee was resigning immediately, citing a 'hostile work environment and adverse employment action.' Loughlin's office said this week his policy is not to comment, while Cappelletti and Lee did not respond to requests to comment. The Groton Housing Authority runs the 70-unit Grasso Gardens and 104-unit Pequot Village housing developments for low-to-moderate-income elderly people or people with disabilities. Frink has said the board has hired a property management company to continue serving tenants while Burt said there's been no impact on residents of the two projects. The housing authority operates as a Connecticut Housing Finance Authority program, and CHFA said it has been made aware of the situation but has no involvement with any investigation and would not be able to comment. The state Department of Housing said it does not have oversight over local housing authorities. The Winchester properties Documents show Greater Groton Realty Corp., the authority's nonprofit arm, owns two adjoining properties in Winchester, a town in Litchfield County, that it purchased in 2019. One is a 1.78-acre property, a shuttered nursing home appraised at $1.08 million that it purchased for $260,000. The other is a 0.48-acre adjoining parking lot worth $39,400, that the Greater Groton Realty Corp. purchased for $0, according to Winchester records. Geoffrey M. Green, Winchester's assistant town planner, said there are no current permits or applications for the properties. He also said there is an active blight violation for the nursing home site, which is accruing daily fines of $99. As of Friday, the total fine owed was $59,202. Ashley Kelsey, Winchester's collector of revenue, said $36,377 in back taxes on the property, as well as $1,265 in outstanding taxes for the parking lot, have been referred for collection. Questions about loan Town and authority emails show questions have been raised about an unpaid $1.75 million loan for equipment that a bank and local officials say has not been located. Texas-based TransPecos Banks has been demanding payment of the loan given to Northeast Redevelopment LLC, a limited liability company affiliated with the housing authority, which operates as its construction arm. On Friday, TransPecos Chairman Patrick Kennedy Jr. said Northeast stopped paying the loan, which the bank made with the intention that it would be used for equipment to drill geothermal wells to bring heating and cooling to housing projects, last March and the loan is now in default. TransPecos Banks has filed a lawsuit against Northeast Redevelopment to repossess the equipment. He said when bank representatives came to Groton last month, it became clear that housing authority commissioners did not know about the loan or the equipment, though they recalled heavy equipment being used several years ago to drill geothermal wells for two new units. On Friday, Kennedy said the bank feels sorry for the housing authority and the town and will work cooperatively with the authority. TransPecos Banks said it had financed the equipment through a lease to Northeast Redevelopment LLC, guaranteed by the authority and Greater Groton Realty Corp. The 2020 lease lists equipment, including plow trucks, a pickup truck, a tandem axle trailer, geothermal equipment, a sawmill, and a towable generator. Northeast Redevelopment LLC, under managing member Greater Groton Realty Corp., was created in 2018 and dissolved in 2021. Greater Groton Realty Corp. filed a certificate of organization to create another company, Northeast Redevelopment Services LLC, in 2019. In a February 2024 correspondence to TransPecos, Cappelletti wrote that the housing authority issued bonds, of which Northeast Redevelopment Services is the beneficiary. He did not specify what the bonds were for but wrote that once they were received by the end of the month, the plan was to pay the loan based on a bank schedule. Still seeking payment four months later, the bank informed Northeast Redevelopment Services that it had failed to make payments on time or make alternative arrangements and demanded payment of the entire loan, plus interest, within 10 days or the bank would take action, including repossessing the equipment or filing a lawsuit. In an August 2024 email to the bank, Cappelletti wrote that Northeast Redevelopment Services was in the process of closing on the bonds and expected to receive funds by the end of the month. 'The funds will be adequate to catch up on the delinquent balance this month and next month we would like to pay off the entire remaining loan amount,' Cappelletti wrote. Last December, a bank attorney wrote to Cappelletti and Greater Groton Realty Corp. President Nancy Codeanne, an authority member, that the last payment was made in March 2024 when the balance was $1.6 million, but interest, late fees and legal costs had since accrued. The letter pointed out that Cappelletti had been assuring the bank earlier in the year that bond financing was being pursued to pay off the loan. Last month, Kennedy emailed Frink that he wanted to see where the geothermal equipment, vehicles and other equipment were located. As of last week, the equipment had not been located, Burt said. Authority attorney Cindy Cieslak said the authority will not be answering further questions about the investigation as the matter is under review. Town seeks information Following a Jan. 14 executive session with town councilors, Town Attorney Kristi Kelly wrote a letter to Frink requesting financial statements and resolutions for loans, bond issuances, corporate ownership changes, and other transactions from corporate entities involving the Groton Housing Authority or Greater Groton Realty Corp. She also requested an inventory of fixed assets, including equipment or personal property purchased with loan proceeds or used as collateral. Burt said the Town Council wants to stay informed to ensure there's no risk to any residents of housing authority properties. He said councilors also appoint the authority's commissioners, so it's important they are comfortable with its leadership. He said the authority receives no funding from the town. In the letter, Kelly raised a list of 'concerning facts' that came to the council's attention. Kelly wrote that, according to TransPecos Banks, Lee and Cappelletti represented that Northeast Redevelopment Services had $1.3 billion in bond money in a trust that it would use to pay the loan. But Kelly said the authority's bond counsel has indicated she is unaware of any bond issuance over the past 18 months but that she's still owed $21,000 for other work. Kelly added that there was a memorandum contemplating a $1 billion bond offering by the housing authority last year, but she said that timeline does not match claims that bonding took place in 2023 and proceeds were in the authority account by the end of that year. That bonding would have been for the envisioned Groton 2030 plan, a residential and commercial redevelopment project by the housing authority and its subsidiaries Northeast Redevelopment Services Inc. and New Groton LLC. Kelly's letter also points out there have been membership changes in the limited liability companies connected to the authority. For example, in January, Greater Groton Realty Corp. was dropped as a member of Northeast Redevelopment Services LLC.
Yahoo
15-02-2025
- Business
- Yahoo
Groton Housing Authority suspends executive director
Groton — The Groton Housing Authority has suspended Executive Director Robert Cappelletti and terminated a shared-services agreement with the Meriden Housing Authority that has been in place since 2016. Groton Town Manager John Burt said Friday the Groton Housing Authority has also undertaken an investigation of its finances and is now working with the Federal Bureau of Investigation. 'The town and I have grave concerns about potential financial issues at the Housing Authority, but we're working hand in hand with the GHA board, and we'll work through the process,' Burt said. The Groton Housing Authority Board of Commissioners hired CBIZ of New Haven to 'provide forensic investigative services to GHA,' according to minutes of a Jan. 17 special meeting of the Groton Housing Authority. The termination of the contract with the Meriden Housing Authority was effective Tuesday, according to a letter from the Groton Housing Authority to the Meriden Housing Authority provided to The Day under a Freedom of Information Act request. The Groton Housing Authority and the Meriden Housing Authority have had an agreement in which Cappelletti, the executive director of the Meriden Housing Authority, also serves as the executive director of the Groton Housing Authority and the Greater Groton Realty Corp., a subsidiary of the Groton Housing Authority. CT Insider, which has been reporting on litigation involving the Meriden Housing Authority and Maynard Road Corp., an associated nonprofit that supports development but has been sued over alleged nonpayment of loan, first reported the news. Jamie Lee, who served as property manager for Groton Housing Authority, was placed on paid administrative leave on Jan. 19. Burt said she subsequently quit. Cappelletti and Lee could not be reached for comment Friday. Robert Frink, the chairman of the Groton Housing Authority Board of Commissioners, declined to comment. The new property manager for the Groton Housing Authority is Hartford-based Imagineers, LLC., while the GHA maintenance foreman and resident services coordinator will continue to be housing authority employees, according to minutes from a Feb. 5 GHA meeting. The Groton Housing Authority manages the 104-unit Pequot Village housing complex and the 70-unit Grasso Gardens housing complex. Cornelius Ivers, chairman of the Meriden Housing Authority, said he is happy to have Cappelletti back full-time. He called Cappelletti 'one of the excellent executive directors in the state,' and said he has 'done a tremendous job for us up here.' Ivers said Cappelletti was not suspended because of wrongdoing but because the agreement between the two housing authority was set to end. Ivers said nothing is going to be found from an audit and investigation.
