While “concerns” were raised by members of the public and the City Council about the fiscal operation of Whitby Castle not long after Rye Golf Club took over operation of the restaurant in January 2006, it wasn’t until last summer that the shadow of an enormous scandal emerged.

 

By Robin Jovanovich

 

While “concerns” were raised by members of the public and the City Council about the fiscal operation of Whitby Castle not long after Rye Golf Club took over operation of the restaurant in January 2006, it wasn’t until last summer that the shadow of an enormous scandal emerged. Since then, a mound of evidence has been uncovered by the City Manager and staff — and a Rye citizen and member of the club — clearly showing that the now-former General Manager, Scott Yandrasevich, set up a staggering number of improper, and undisclosed, outside agreements and pocketed hundreds of thousands of dollars in the process.

 

In mid-October, with evidence mounting, the Council retained Brune & Richard LLP to perform forensic accounting/investigative consulting services. On Wednesday, Brune & Richard attorney Theresa Trzaskona released her factual findings. They showed a pattern of unethical accounting practices going back to 2007, when Yandrasevich began using RM Staffing, a Rye-based firm that was in fact little more than a dummy corporation he and his wife profited from. Yandrasevich assured the Rye Golf Commission back in September that, “For the record, I have no ownership interest, nor does any of my family or any relative have any ownership in the company.” He did, however, acknowledge that he had “consulted” for RM Staffing.

 

Trzaskona presented 67 Exhibits in her lengthy report, detailing overbilling by RM Staffing and improper funneling of funds by Yandrasevich through RM to pay off, in one case, a personal debt in the amount of $6,891. In 2010, according to the summary report, Yandrasevich “arranged for the Rye Golf Club lifeguards … to live together at a small apartment beneficially owned by his friend, Joe Pacelle.” The rent increased dramatically in the next two years from $1,500 per month plus utilities to $4,750 for space above Fairway Auto, Pacelle’s business in Mamaroneck.

 

Mrs. Yandrasevich, according to 1099 Forms from RM Staffing, received payments totaling $57,500 from RM Staffing from 2007 to 2009. In late 2009, she was put on the payroll, starting with biweekly paychecks of $1,000. By May 2012, she was receiving $4,200 biweekly.

 

Because of the seriousness of the evidence, the case has been turned over to the Westchester County District Attorney’s office.

 

After the report was made public February 27 and before the City Council meeting that night, Mayor Doug French told the paper, “What the investigation shows is that at the very outset, an individual was able to manipulate a system that transpired over six years and across many, many roles and individuals. It is the City’s Madoff moment, where wrongdoing went unnoticed, and where there wasn’t one break in the chain, but several.” He continued, “While we will pursue all avenues for restitution, we will also work to restructure our enterprise fund models and restore credibility.”

 

A number of residents have charged the current City Manager and the City Council with negligence in their review of Rye Golf operations. Brune & Richard, whose fees have totaled close to $300,000 so far, said that “opportunities to prevent or shut down the scheme were missed” over the years.

 

“Former City Manager Frank Culross, former City Comptroller Michael Genito, and then-Deputy Comptroller (now acting Comptroller) Joseph Fazzino each recalled a brief discussion during which Mr. Yandrasevich may have mentioned RM Staffing, but none of them was aware that RM Staffing had been established at Mr. Yandrasevich’s request. Each current and former employee who reviewed the invoices relied on Mr. Yandrasevich to confirm that the invoices should be paid,” Trzaskona concluded in her report. 

 

 Exhibits 1-4