NYC investigators uncover 35-year tax scam

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Posted 9:55AM on Tuesday, February 26, 2002

NEW YORK - In the largest tax scam in city history, more than a dozen assessors took bribes ranging from expensive meals to thousands of dollars during a 35-year scheme that cheated the city of hundreds of millions of dollars, investigators said. Seventeen people were arrested Monday and an additional defendant was expected to surrender Tuesday on charges of taking or giving more than $10 million in bribes to alter the assessed values of commercial properties. ``These folks sold their office and sold out the people of New York by taking bribes,'' U.S. Attorney James Comey said. ``In doing so, they undermined a bedrock of this city's finances - a fair and honest tax assessment system.'' The indictment, filed in federal court, accused the assessors of accepting bribes for at least 35 years to under-assess values of more than 500 properties worth a total of $8 billion. Lower assessments mean smaller property-tax bills for the owners. According to published reports, the scheme reduced taxes on such well-known Manhattan buildings as 1 United Nations Plaza, the Le Parker Meridien hotel and 9 W. 57th St., which has a huge red sculpture ``9'' in its plaza. Twenty percent of the city's budget comes from property tax revenue and the loss of taxes probably cheated the public of new schools, better roads and services, FBI Assistant Director Barry Mawn said. ``Everybody was getting a piece of the pie. They were protecting one another,'' Mawn said. ``It was kept very quiet.'' The scheme, which was concentrated in Manhattan, cost the city about $160 million in lost tax revenues since 1997, Comey said. The indictment sought the forfeiture of the lost revenues and an additional $10 million allegedly obtained through bribes. Keith Schwam, a spokesman for the city Department of Investigation, said the corruption may lead to reassessments of 500 properties and a ``broad review'' extending to other properties. Sixteen assessors and two property owners, both former assessors, were indicted on racketeering, bribery and fraud charges. Each face up to 20 years in prison and substantial fines. More than one-third of the current 36-member Manhattan tax assessor staff was implicated. Of the assessors indicted, 13 currently work in the Manhattan assessor's office, one is retired and two others work in other boroughs. The city is no stranger to public corruption. William ``Boss'' Tweed and his political cronies, who dominated New York's political machinery in the 1860s, embezzled tens of millions from city institutions. And Mayor James J. Walker resigned in 1932 after the state Legislature ordered an independent inquiry that revealed corruption and bribe-taking in the mayor's office and city agencies including the magistrates' courts. Authorities said two individuals accused in the indictment of paying bribes to tax assessors included Albert Schussler, 85, a major property manager, owner and former longtime assessor who allegedly engaged in the plot since 1967. Schussler was released on $250,000 bail after a court appearance Monday. His lawyer, Stephen Kaufman, declined to comment. The other defendants were each released on $25,000 bail. Comey would not comment on whether any additional arrests were expected or if any other assessors or property owners would be indicted. The investigation, dubbed Operation Knockdown, was continuing, he said. Investigators learned of the scheme in early 2000 during the prosecution of someone involved in the plot. ``That more or less opened the doors,'' Mawn said.