County IDA looking into missing $52K

JOHNSTOWN – The Fulton County Industrial Development Agency will try to find out what happened to a $51,700 payment the IDA says it never received.

The current IDA board decided Wednesday to have agency attorney Kara Lais contact former IDA attorney J. Paul Kolodziej to seek documentation about a lot sale the IDA says should have resulted in the payment.

“You could certainly reach out to him,” Lais said. “I’m not sure he’s going to want to get involved with that in a simple request.”

IDA Executive Director James Mraz explained a state Authorities Budget Office review from 2011 found the IDA in 1988 donated 5.17 acres in Gloversville’s Crossroads Industrial Park to the Crossroads Incubator Corp. The donation was made with the understanding that if the land were transferred or sold, the IDA would receive a payment for the lot.

The CIC sold the property in 2007 but never made a payment to the IDA, the IDA maintains.

After the CIC didn’t make the payment to the IDA, Mraz said the IDA began an investigation. It found the IDA in 1988 provided the 5.17 acres to the CIC at no cost to use to construct an incubator building on the condition the payment for the lots would be deferred until the property was sold. The lot sale price in 1988 was $10,000 per acre, so the total price was $51,700.

Mraz said no record was found showing the IDA received a $51,700 payment from the CIC.

Kolodziej was the IDA and CIC attorney at that time.

Mraz said since this discovery was made, the IDA’s audit has included a note acknowledging the $51,700 is an “unknown receivable.” He said West & Company – the IDA’s auditing firm – and Lais both recommended the IDA write off the amount as an uncollectable debt.

But when the writing off of the debt came before the board Wednesday in the form of a proposed motion, IDA Chairman Joseph Gillis felt differently.

“My personal opinion is we shouldn’t write it off,” Gillis said.

Gillis said the IDA should contact Kolodziej.

Lais said the IDA can contact Kolodziej, but he’s under no obligation to cooperate. She said the IDA could start a civil case, but there might be an issue with a statute of limitations.

Kolodziej didn’t return a phone call Wednesday seeking comment.

Kolodziej is a former 20-year attorney for the IDA and Fulton County Economic Development Corp. and CIC, serving as counsel for all three entities. He currently has a private law practice at 350 N. Main St. in Gloversville.

Kolodziej pleaded guilty in October 2010 in Gloversville City Court to a misdemeanor count of fifth-degree criminal tax fraud. Kolodziej was fined $5,000. He admitted to failing to file timely state personal income tax returns for 2002 through 2008.

He was charged in January 2010 with two counts of criminal tax fraud and four counts of failing to file timely returns. Kolodziej could have faced up to seven years in prison if he had been convicted.

After being notified of the investigation in 2009, Kolodziej filed all of his delinquent income tax returns and paid the tax, including penalties and interest, totaling more than $120,000.

The tax returns indicated Kolodziej earned more than $1.1 million from 2002-08 and owed the state $59,178 in taxes.

Kolodziej’s name also surfaced during a scandal involving the EDC a few years ago.

The Fulton County Center for Regional Growth’s two subsidiaries – the EDC and CIC – in October dropped their civil lawsuit against fired former economic development executives Jeff Bray and Peter A. Sciocchetti. The pair were accused by the CIC and EDC of taking millions of dollars in bonuses not approved by the agencies’ boards of directors. The bonuses were discovered in May 2010.

The EDC and CIC filed a civil lawsuit Sept. 29, 2011, in state Supreme Court in Johnstown against Schenectady resident Bray and Niskayuna resident Sciocchetti to try to recover the money.

The EDC also sought legal fees the agency claims Bray wrongly provided to Kolodziej.

Michael Anich covers Johnstown and Fulton County news. He can be reached at manich@leaderherald.com.