Yonkers Inspector General Covill’s Report on Commercial Loans By HEZI ARIS

eHezi Archives 21 Comments

COVILl-Kitley S

Inspector General Covill Releases Report on Findings of Over $650,000 in Defaulted
Commercial Loans Provided by Previous Administration

YONKERS, NY — January 23, 2013– Yonkers Inspector General Kitley Covill unraveled lax
standards and protocol in the process of reviewing Yonkers Commercial Loan
portfolio. She advises of the “eleven commercial loans outstanding; four of
those loans are current, one entity recently became delinquent on its loan and
six loans are in default”. A glaring concern from which I.G. Covill did not
recoil is her mention that at the “start of the I.G. review not all of the
entities that were in default were being sued, but as of the date of this
report [January 23, 2013], all of the entities in default are now being sued or
in the process of being sued by the City for repayment of what is currently
owed.” Most importantly, I.G. Covill was not shy in making mention that, “All
of the commercial loans were made by the prior Administrations’ [e.g. former
Mayor Phil Amicone’s] Office of Economic Development.

 Ms Covill cites the “City of Yonkers Office of Economic
Development (this department was folded into the Department of Planning in
2012), Commercial Loan Policies & Procedures manual that specifies
everything that should be reviewed prior to making a commercial loan.”  She points out the manual states, “Every loan
must have two ways out. The first way out is cash flow. The second way out is
collateral. In all cases however, collateral must be adequate to secure the
obligation. Noting the precarious financial circumstances that has befallen the
nation, and likewise the City of Yonkers, she shares her belief that, “It is
not surprising that a number of the business entities have had financial
challengs and are gaving trouble repaying the City.” 

Ms Covill findings are telling. She learned that the files
kept by the Department of Planning (DoP) require documents that referenced the
application and financial review of the borrower and the proposalfor use of the
loan proceeds, the commitment and loan terms for issuance of the loan, the
closing and disbursement of the loan, and the servicing of the loan with the
City’s bank. The simplicity of those standards were found by I.G. Covill to be
“completely disconnected in the file, handled by different people, the files
were themselves somewhat organized but incomplete, and oftn missing crucial
documentation, including signed copies of the Promissory Note, conflicting
terms for commitment of the loan as opposed to what appeared in the closing
documents and even confusing language regarding payment.”

On top of that, “The files included haphazard communications
concerning loan status and litigation. Often it was not clear from the official
DoP file who handled the closing and what arrangements were made to set up the
payment of the City’s bank. In one case, when a City employee inquired as to
the status of the loan, the bank employee handling the payments noted that the
principal wasn’t due for ten years. The information was incorrect as principle
payments were to have commenced one or two years after the loan was disburse.” A
Promissory Note states the loan is for ten years, interest only is payable for
the first two years, and the principle is amortized over nine years.

Making matters more obtuse, 
despite the City always obtaining joint and several personal guarantees,
the examination of personal financial statements was not thorough, and the
City’s collateral for these loans were not always as outlined. In one loan the
commitment required the City’s loan to be placed in second position after the
primary lender, but apparently the City’s loan ended up being placed in fourth
position, and this placement was known prior to the loan closing and
disbursement.” Another one of Amicone’s “wink, wink” contract. “In one of the
lawsuits filed before 2012, it is unclear from the City’s files what collection
efforts were made, even when judgments against the guarantors were obtained.”

I.G. Covill delineated 8 specific standards and protocols
that need be followed in the future… refer to PDF

In default are:

C-telli Food Corp…

$48,000…Default $11,174.30…Status – Sued 2012

 Action Press–Marty

$14,248…Default $ 
2,016.91…Status – Sued 2013

Infinity IV LLC /Lejends IV – Kathy Israel’s Lejends

$100,000..Default $65,890.76…Status – Judgment Obtained

The Pizza Place

$ 90,000…Default $54,297.95…Status – Sued 2013

Zendom, Inc. d/b/a Chartreuse Bistro

$ 97,417.46Default$82,546.29…Status – Legal Papers Prepared

Body & Soul Essentials, Inc. d/b/a Wholesome Goodness

$150,000…Default $149,964.33..Status – Legal Papers Prepared

T.G.F.J. Corp

$ 35,000…Default $ 25,012.49-recent delinquency-working w

Download COVILL-012313-Commercial Loan report 2013

eHeziYonkers Inspector General Covill’s Report on Commercial Loans By HEZI ARIS

Comments 21

  1. i’m for the first time here. I came across this board and I in finding It truly helpful & it helped me out a lot. I hope to give one thing again and aid others like you helped me

  2. I accept Yonkers Inspector’s advice. She provided a great advice on commercial loan. She is having decent experience over financial market. She is really knowledge and people respect her advice and also accept.

  3. I have also checked her advice, she advised for the “eleven commercial loans outstanding; four of those loans are current, it was really a great advice. Ms Covill is really so smart and experienced person.

    Yonkers P.B.A. President Keith Olson managed to infiltrate one comment on the last article that was submitted about his unethical behavior .
    It seems that he himself may be shopping around for representation as he may face questioning surrounding why he was caught vandalizing city owned fuel pumps, and precincts walls.
    Recently, Olson set a new standard. He thought that his membership would forget that he and his allies worked very hard with the previous administration in undermining the Police Commissioner Robert Taggart in the hopes that the great messiah John Mueller would become the new commissioner, and that he could play the unofficial role as Deputy Commissioner. Therefore have the power to call all the shots. However, their great plan backfired, and landed them Harnett, who had his own agenda. As they provided information, Harnett targeted certain members of the P.B.A. In return, Harnett cuddled them while dismantling units from the department, and cut orders like sandwiches, while P.B.A. President Olson sat on the wall like “Humpty Dumpty”.
    The truth is that Olson and his cronies were well taken care of while the membership from the C.L.S. and the P.B.A. hump the radio. It was a unprofessional ploy by the people involved that cost the membership positions and a potential contract. Unfortunately to both memberships, Harnett, the City, and Olson were able to divert the truth to the city’s financial woes. If any member spoke out to the membership, they were targeted by premeditated, misleading and unauthorized investigations conducted and planned by P.B.A President Keith Olson, Captain John Mueller, and Detective Sergeant Brian Moran of the Special Investigation Unit. The Yonkers Firefighters should well know that these members led one of the city’s largest probes into the larceny of city gasoline, in which they took great pride in parading and interviewing close to one hundred working Firefighters from another union, at the urging of then Deputy Mayor Regan.
    Now, the “trio” are the minority that carries that rancid smell of rodents that can’t spray paint their way out. The truth is, their careers are over in this city because they have no credibility, and are forever stained with mistrust. Union officials from this city must move to rid this city of such an odor, and memberships from all unions must voice their dismay by the power of the election process. The Yonkers P.B.A. membership need to find their way back to the right path without Olson, so we can begin to be recognized by the City of Yonkers, and other Union Leaders as a professional and responsible union. That is the message of necessity that cannot be misconstrued, or misquoted.

  5. You seem to be a bit misinformed. Mr. Johnson has no harrassment charges filed against him. Mr. Russell, on the other hand, has been under serious on-going investigation, and who knows when the next shoe will drop?

  6. The first thing you need to do is investigate Paula Redd and associates, she keeps hiring African Americans right and left. She keeps protecting Mark Russell and his deputy, Johnson, from the harassment charges filed against the two of them. Investigate the Tax Dept. and its Commissioner. Find the missing money. Investigate the unproper liens on properties that are up to date on their tax payments….IG please investigate…Mike and Steve when are you going to ask the right question to your commissioners. STOP looking the other way and proptect the people that really work no the crooks you hired…The people of Yonkers deserve better. DO YOUR JOB and honor your promises.

  7. As you all know, both of them stand for corruption. Different administration same kind of deals. Taxpayers’ money go into their packets.

  8. I never liked the idea of an outside agency running the city. It is like paying someone else for the job these guys are supposed to do. But it is bad.
    Wait till they scam this property deal for the schools through the system. Your taxes will look like the price of gold over the past few years.

  9. I really think we need a control board now, no one in this city seems to tell or know the truth in reference to the taxpayer’s dollars.
    The schools suck more than they ever did and the only cuts this administration wants to make are to essential services (police,fire & dpw).
    It’s time to really evaluate the necessity of the hires in City Hall and their excessive salaries.

  10. this is chicken feed compared to the IDA deals that have been made legit.
    Nice try to do some slight of hand magic to get us off the track of the true problem.
    Any word on the personal loadn to cappelli?

  11. No mention of X20/Zuppa??? Im sure there a couple Mill shoved down there in the seat cushions of Phils old couch….
    We live in the scummiest city around!

  12. Since when has the $HITTY OF YONKERS, got into the banking business? Where is it in the Charter that dictates that this is allowed?
    Is the friends and family bank involved? You know the one that got boat loads of taxpayer money laundered through the friends and family club members who are all around town?

  13. And why is MARTY PETERSON still on the Yonkers Payroll. He bought a boat last summer, so pay your bill Peterson. He’s a loser…..

  14. hahahahahaha Action Press – MARTY PETERSON – hahahahahah
    the Same Marty Peterson who eventually took and passed DOME KIND OF CIVIL SERVICE TEST after years on the payroll and addressed the city council last year to save his city job which was set for the chopping block. You CANNOT make this up, folks. Only in Yonkers. Gee, I think Marty’s firm even printed the program and invitations for Amicone’s second term in office commencing 2008. Not too bad – city job, city printing on the side.

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