A judge sentenced a Westhampton businessman convicted of fraud and grand larceny to a maximum of 15 years in prison last Thursday as punishment for his theft of $3.2 million from hundreds of companies across Long Island.
In addition to serving up to 15 years in jail, Judge C. Randall Hinrichs ordered that Herbert Geller, 60, the former owner of the now-defunct Bohemia-based Quality Payroll Systems Inc., also pay $2.2 million in restitution to the businesses from which the money was stolen. Mr. Geller had already paid back some of the stolen money, according to his attorneys.
Mr. Geller was convicted in September of one count of scheme to defraud and 20 counts of third-degree grand larceny, all felonies. Mr. Geller, who could have been sentenced to up to 30 years in prison, has been incarcerated since the fall as he was unable to post $1.2 million bail.
In 2006, Mr. Geller used money that his clients believed would be put toward paying their payroll taxes to keep his struggling business afloat, according to prosecutors.
After his client’s sentencing, Eric Prusan, Mr. Geller’s Mineola-based defense attorney, said he would appeal the ruling. Mr. Prusan argued in court last Thursday that Mr. Geller should have received a sentence incorporating the four months in jail he has already served and should be required to pay only $1.2 million restitution.
“I’m deeply disappointed,” Mr. Prusan said after his client’s sentencing.
Ming Liu Parson, the Suffolk County assistant district attorney who is prosecuting the case, noted that Mr. Geller could get out of prison and be on probation within five years.
Christopher Nicolino, the deputy bureau chief for the Suffolk County District Attorney’s Economic Crime Bureau, explained that Mr. Geller sent in tax returns to the Internal Revenue Service for his clients but did not send in the tax money with them. Instead, he kept the money for himself, Mr. Nicolino said.
“He did it because he was trying to keep his business afloat,” he said. “He had made some bad investments.”
Mr. Geller’s business clients, after realizing that Mr. Geller had pocketed their money, were forced to pay their taxes again—with interest and late fees. Mr. Nicolino explained that Mr. Geller stole money from 430 companies on Long Island, though only 20 businesses were listed in the indictment. Two of those companies—Southampton Masonry Inc. and Maran Corporate Risk Associates Inc—are based in Southampton. Officials for those companies did not attend the sentencing.
William Gorman, the co-owner of Ronkonkoma-based Barnwell House of Tires, was one of two victims who attended Mr. Geller’s sentencing. Mr. Gorman explained that he had to borrow from his bank in order to pay his taxes, noting that he is still paying off that loan. In total, Mr. Gorman said he had lost approximately $50,000 due to Mr. Geller’s fraud scheme.
Mr. Gorman pushed for a lengthy sentence and full restitution for all Mr. Geller stole prior to last week’s sentencing. “I thought I could trust Mr. Geller,” Mr. Gorman said at the sentencing. “Bert Geller is a greedy thief.”
Mr. Geller’s wife, Barbara, a former Suffolk County school teacher, and their daughter, Jamie, begged Judge Hinrichs to have leniency on Mr. Geller. They told the court that Mr. Geller has diabetes and suffered three heart attacks. He has also undergone quadruple bypass surgery.
“This is a death sentence for a man with his health conditions,” Jamie Geller said.
In an effort to show her husband’s good character, Ms. Geller noted that he was employed as a kindergarten teacher in the Hampton Bays School District in the late 1970s. She noted that he left the district due to a lack of students. Mr. Geller was employed by the district from 1976 until 1979, according to school district officials.
Mr. Geller also spoke on his own behalf, apologizing to his family and the business owners whom he stole from. “They placed their trust in me, and I let them down,” Mr. Geller said. “It was never my intent not to repay them … I never realized [it] was criminally wrong.”
Despite the pleas of the Gellers, Mr. Geller’s lawyer and Kenneth Marten, the Mineola-based attorney representing Quality Payroll Systems, Judge Hinrichs sentenced Mr. Geller to 15 years, which he will serve in an upstate prison.
“However much regret the defendant has, he made an intentional decision to take millions of dollars from people,” Judge Hinrichs said. “Our society cannot condone this type of blatant fraud and theft without severe consequences.”
Both Mr. Gorman and Rick Vairo, the president of Smithtown-based Aurora Group, also a victim of Mr. Geller who was present at the sentencing, agreed that justice was served.
“I feel that the judge was fair,” Mr. Vairo said. “I’m satisfied.”
Both Mr. Gorman and Mr. Vairo added that they still intend to file civil lawsuits against Mr. Geller and Quality Payroll Systems.
The $2.2 million in restitution that Mr. Geller must pay was a number devised by a forensic auditor with the Suffolk County District Attorney’s office. The figure is less than the total that Mr. Geller stole because he paid some money back to the companies, officials explained during the sentencing.
Ms. Parson said documents show that Mr. Geller has $2 million in assets that could be liquidated to pay what he owes. The assets might have to be acquired through civil forfeiture, she explained, as Mr. Geller’s family has not yet made any indication that they will voluntarily give up the money.
“Justice was served,” Ms. Parson said. “Mr. Geller received a very significant state sentence which, as the court stated, is appropriate under the circumstances.”