The Town of Secaucus is missing $777,725 in property tax payments that were never received by the municipality, according to a recently released audit ordered by the town last summer after a financial shortfall was uncovered in the Tax Collector’s Office.
Tax Collector Alan Bartolozzi is already facing criminal charges in connection with the missing funds, although the exact amount missing was not confirmed until recently.
The Office of the Hudson County Prosecutor last year charged Bartolozzi with two counts of theft after town officials discovered a shortfall and alerted prosecutors of the problem.
Bartolozzi is also facing separate charges for allegedly taking money from a municipal workers’ union, as well as drug possession charges. He remains suspended without pay.
Residents are no longer allowed to pay their tax bills in cash.
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Town Administrator David Drumeler said the municipality will now submit insurance claims to recoup the lost tax revenue.
“We’ll take any expenses we incurred with regard to the investigation and add that to our insurance claim,” Drumeler said.
Secaucus has $1 million worth of insurance to cover losses in the tax office. The bonding company that insures Bartolozzi will pay the first $250,000 of the insurance claim, and the remainder will come from the New Jersey Municipal Excess Liability Joint Insurance Fund, or MEL.
The MEL agreed last year to cover the costs associated with the audit, which examined tax records as far back as 2004 or 2005, according to Drumeler.
The alleged scheme
Among other details, the audit outlines how Bartolozzi allegedly skimmed money from tax payments.
Town Councilman Gary Jeffas, who was the first to call for an independent audit of the Tax Collector’s office last June, explained that according to the audit, the scheme relied heavily on tax payments that were made in cash.
Cash payments were allegedly stolen, leaving these tax bills unpaid. Later, payments from other taxpayers would be used to pay off the unpaid bills, and so on.
“Let’s say you come in to pay your taxes, and you’re somebody who likes to pay your taxes in cash. You say, ‘Here’s my $2,000.’ But your $2,000 never gets applied to your [tax bill],” Jeffas said. “Now, I come in and I say, ‘I want to pay my taxes’,” Jeffas said. “And maybe I even pay by check. What would happen is, my money would be applied to [your] account. Then somebody else comes in to pay their taxes. Their payment would be applied to my account. It was always on a rolling schedule.”
Until this year, many residents, particularly senior citizens, paid their quarterly tax bills in cash. Although most residents paid their taxes by check, auditors believe there were enough cash payments made that it was easy for the alleged thefts to go undetected for years.
Individual taxpayers, Jeffas added, weren’t aware that their bills were going unpaid because “the tax collector was the only one who had control over which delinquency notices were sent. I can only assume that at some point it just got too big to keep track of.”
Changes made
Even before the audit was completed, the Town Council implemented several changes within the Tax Collector’s Office.
In January, the council passed a resolution barring property owners from paying their tax bills in cash.
The auditors recommended a number of other changes that have also been implemented, Jeffas said. Employees in the Tax Collector’s Office now have assigned drawers that are used to collect checks. That way, at the end of each day it is clear how much money each employee collected. Before, one drawer was used to collect all tax payments that were made in person. Also, each employee now has a unique username and password to access the computer system in the office. Previously, everyone in the office shared one username and password.
Finally, the town’s auditors will periodically confirm payment records with individual taxpayers.
Charges still pending
Last year, the Hudson County Prosecutor charged Bartolozzi with two counts of theft in the second degree for allegedly taking “an amount in excess of $75,000,” according to court papers. Bartolozzi was also charged with one count of cocaine possession in the third degree after officials allegedly found remnants of cocaine in his desk.
“Each count of theft in the second degree carries a maximum penalty of 10 years,” Hudson County Prosecutor Edward DeFazio said last year. “But he would really serve 10 years, not 20, because the judge would combine the sentences to run concurrently.”
When the alleged problems in the tax office were first uncovered, Bartolozzi was also treasurer for the Secaucus Public Employees’ Association, a municipal workers’ union. Association President Charles Schumacher began examining the union’s books in the wake of the Town Hall investigation. Last July, Bartolozzi was charged by the county prosecutor with another count of theft, this one in the third degree for allegedly stealing $4,150 from the union. He was indicted on this charge on Jan. 19, 2010, according to Assistant Hudson County Prosecutor Leo Hernandez.
Hernandez said last week that the drug charge and the charges stemming from Bartolozzi’s work in the Tax Collector’s Office “have yet to be presented to a grand jury,” therefore he has not been indicted on those charges.
Bartolozzi has recently changed lawyers and is now being represented by Don Gardner.
Disciplinary process
For now, Bartolozzi remains suspended without pay from his job as Tax Collector, a status that may change now that the independent audit has been completed.
“We don’t want to do anything to jeopardize the prosecution’s case,” Drumeler said. “So if they told us we could move forward with the disciplinary process, we would. But if they wanted us to hold off, obviously we’d do that. Now that we have [the auditor’s report], we will probably have that conversation soon.”
Since September, Nicholas Goldsack has been working in a temporary capacity as the town’s tax collector. Goldsack receives no salary and instead gets paid $35 an hour.
E-mail E. Assata Wright at awright@hudsonreporter.com.