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UPDATE 1-New York had contact with FBI during Ramapo audit -source
May 23, 2013 / 9:32 PM / in 4 years

UPDATE 1-New York had contact with FBI during Ramapo audit -source

By Edward Krudy

May 23 (Reuters) - New York State officials auditing the town of Ramapo, New York, which is now the subject of a federal investigation, had contact with federal law enforcement during a state audit in 2011, according to a state official with knowledge of the matter.

The FBI conducted what it described as a law enforcement operation in Ramapo on May 15, when it raided town offices, but it has declined to comment further on the investigation. A spokesman said the FBI would not make an announcement until formal charges had been made.

Neither town nor law enforcement officials have revealed reasons for the investigation.

The official said the auditors for the state comptroller’s office have not had contact with the FBI since the audit, which was published in February 2012. The official declined to be named as the investigation is not public.

In its report on the audit, the comptroller’s office criticized Ramapo’s funding of a minor league baseball stadium that it said could leave taxpayer on the hook for $60 million.

The stadium was financed through the town’s Local Development Corporation, a private, not-for-profit corporation. The state comptroller’s office does not have full audit powers over the corporation.

Officials at Ramapo, about 40 miles (64 km) north of New York City, did not return requests for comment.

“Ramapo officials ignored red flags that the project numbers didn’t add up, which could adversely impact its finances for years to come,” state Comptroller Thomas DiNapoli said at the time of the audit.

The Ramapo Local Development Corporation did not return requests for comment.

Ramapo has now postponed issuing nearly $40 million in general obligation public improvement bonds that were scheduled to price on Thursday, according to data company IPREO.

The town’s financial adviser said the debt sale would likely take place next week.

“We have converted from a sale of bonds to a sale of notes,” Ramapo’s financial adviser, Environmental Capital, said in e-mailed comments. “We anticipate a closing next week.”

The advisor did not say why the sale had been postponed or why notes were being offered instead of bonds.

Moody’s Investors Service last Friday said it may cut the town’s A1 general obligation bond rating, citing the federal investigation. Standard & Poor’s Ratings Services and Fitch Ratings do not rate Ramapo.

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