New York hedge fund under scrutiny after taking over ownership of Mount Sunapee lease

 

The above image is from the Mount Sunapee resort website.

By Ray Carbone

NEWBURY – It was a meeting viewed both by complex business interests around the world as well as residents of the Sunapee area.

At a public information session held at the Mount Sunapee Resort’s base lodge last week, more than 100 people gathered to express concerns about the transfer of the lease for the state park’s popular ski resort to one of the largest alternative asset management firms in the world.

Och-Ziff Real Estate, which manages over $30-billion in funds from its offices in New York, London, Beijing, etc., took over the lease as part of a $456 million deal involving 14 properties, most of them family recreation areas, from the previous owner, a real estate investment trust named CNL Lifestyle Properties.

But several people who spoke at the NH Department of Natural and Cultural Resources meeting held on Tuesday, Aug. 22, wondered about the hedge fund’s commitment to maintaining local management and operation of the state-owned recreational facility.

The question has become especially significant after Och-Ziff agreed recently to pay $413 million in federal government fines and other penalties in order to satisfy charges filed by the security and exchange commission that two former company executives operated a “far-reaching” bribery scheme, violating the Foreign Corrupt Practices Act. The SEC says the pair paid tens of millions of dollars to high-level government officials in several African countries – including the son of the late Libyan dictator Moammar Gadhafi – to garner investments as well as other valuable resources, including mining deals, for the company.

“Our firm is not proud of what happened here and we take full responsibility,” David Levine, Och-Ziff’s general counsel, told the audience last week. “It’s a disappointing chapter in our 24-year history.”

Levine blamed “two rouge (former) employees” that acted outside company policy for the bribery incidents, which occurred between 2007 and 2012. He said that the company has instituted several measures to insure that a similar problem doesn’t occur in the future.

The operator of Mt. Sunapee will continue to be The Sunapee Difference, a company owned by Tim and Diane Mueller who have managed the property since 1998.

But Andru Volinsky, a member of the governor’s executive council and the official who asked for the public meeting, said Och-Ziff was making a smart business move. “When I see a company that’s instituted a lot of compliance measures, those are all big steps and you do it to avoid prosecution… Certainly, Och-Ziff has stepped up their game but it wasn’t a completely voluntary matter.”

The original, print version of this story, published in the InterTown Record of Sutton, New Hampshire on Tuesday, August 29, 2017, was ended here for space reasons. Below is additional information regarding the meeting.

Indeed, the U.S. Department of Justice has agreed to delay prosecuting the company any further for three years as executives work to incorporate the new measures aimed at greater compliance with the federal laws, and assist the department of justice’s ongoing investigation.

For some residents, the issue of the new lease owner was not as important as how the transfer occurred. Typically, such arrangements like would be subject to approval by the governor and the executive council.

But Jeff Rose, the commissioner of the state’s department of natural and cultural resources, which has governing authority over state parks, and Anne Edwards, an associate attorney general, said the recent situation was exempt from that requirement because it involved, not the lease itself, but the entity that owned the lease and 13 other properties.

So, while Och-Ziff is now the owner of leaseholder, the lease itself is still owned by CLP Mount Sunapee, LLC, the same organization that has held it for the last nine years. (To the relief of some attendees, the operator of Mt. Sunapee will continue to be The Sunapee Difference, a company owned by Tim and Diane Mueller who have managed the property since 1998.)

At the same time, Commissioner Rose said that the state has already begun negotiations with Och-Ziff on the lease, hoping to alter it to make similar transfers require state approval in the future.

But Steve Russell, the president of the Friends of Mount Sunapee nonprofit organization, said no change is necessary. Speaking on behalf of his group, as well as the NH Sierra Club, Russell said that the property’s original 1998 lease indicates that state official should have reviewed the transfer before it occurred in April.

“Examining risk and financial security are essential to maintaining the public trust,” Russell said at the meeting. “It is standard practice in all state contracts.”

Russell also pointed out that the three-year prosecution agreement that Och-Ziff has with the department of justice i as insufficient as a guard against future misconduct by the firm . He said that Public Citizen, a nonprofit organization that monitors government activities, recently indicated that similar agreements are an “inadequate enforcement and oversight mechanism.”

“We believe the state has abandoned its oversight of the lease of the Mount Sunapee State Park,” Russell added. “We appeal to elected state officials to begin a complete and transparent review of this lease acquisition… so that the people of New Hampshire, who are the rightful owners of the Mount Sunapee State Park, can rest assured that our state park is in the hands of those worthy of the public’s trust.”

The story was originally published in the InterTown Record of Sutton, New Hampshire on Tuesday, August 29, 2017.

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Charges dropped against Sunapee man

By Ray Carbone

SUNAPEE – All charges against a local man charged with illegally altering an email message written by a political foe of his wife’s in a local school board race have been dismissed.

In a ruling in Newport District Court last week, Judge Gregory E. Michael ruled that state prosecutors made a mistake when they charged Joseph Furlong, 40, of Sunapee with two counts of illegally altering an email with the aim of influencing the results of an election (Class A misdemeanor) and one count of forgery (a Class B misdemeanor) related to being an accomplice to the incident.

The incident goes back to March 2016 when, several days before the annual municipal elections, several residents attending a local basketball game were surprised to receive an email message from a woman running for a school board seat.

The message appeared to portray another school board candidate negatively, and alleged sender later told police that she saw an immediate negative backlash from the message.

She later lost the election and Heather Furlong, Joseph’s wife, who was one of three candidates running to fill two vacant seats on the Sunapee school board against the woman, was elected.

‘Although the actual activity complained of by the state (attorney general) may be the same, the conduct of (Furlong) in the three new charges is different, as is the proof necessary for a guilty finding.’ – Judge Gregory E. Michael

 

Within days, Police Chief David Cahill began looking into the situation. Several citizens told him about unusual encounters with Joseph Furlong and the chief questioned the man, who was a producer of the American Builder reality TV series.

Furlong denied sending the altered email but indicated that he was close to finding out who had.

Later that day, Cahill received an email from Adam Gaw of Londonderry claiming responsibility for the doctored message. Cahill suspected that Furlong had “invented” Gaw to take responsibility for the misdeed.

Because the case appeared to involve election fraud, the state attorney general’s office was soon involved.

It took almost one year before the original six charges were filed against Furlong this past March. (Heather Furlong immediately resigned from the school board.)

Days later, Gaw confessed and took full responsibility for altering the controversial email message.

In July, Brian W. Buonamano of the attorney general’s office withdrew the original six charges against Furlong and filed the three newer ones, claiming that had acted “in concert with and/or aided” Gaw to alter the message, and to commit forgery.

But James D. Rosenberg, Furlong’s attorney, asked the court to dismiss the charges. The lawyer said that Gaw’s confession meant that Furlong was now being charged with actions that were significantly different than what was in the original charges. The new actions would require a different kind of defense and, in any case, the legal time limit for charging Furlong for new actions ran out in early March.

Last Tuesday, August 22, Judge Michael agreed with Rosenberg. “Although the actual activity complained of by the state (attorney general) may be the same, the conduct of (Furlong) in the three new charges is different, as is the proof necessary for a guilty finding,” he wrote in his ruling.

In addition, the judge said that the legal statute of limitations “should be liberally interpreted in favor of the defendant (Furlong).”

At press time, there was no information available regarding Gaw’s legal status regarding the charges.

 

 

Local TV producer charged in election fraud trial

By Ray Carbone

SUNAPEE – A local man who helped produce the American Builder TV series with reality personality Brain Gurry is scheduled to go on trial in Newport District Court this week for allegedly altering an email in order to damage the reputation of a political opponent of his wife’s in a local school board race.

Joseph Furlong, 40, of Sunapee, is charged with two counts of altering an email written by another person with the aim of influencing the results of an election (Class A misdemeanor) and one count of forgery (a Class B misdemeanor) related to being an accomplice to the incident.

Furlong is listed on the International Media Database website as associate producer of the American Builder television show from 2004-2007. The program, which is seen on the Tuff.TV network, features Gurry, who has been on at least two National Geographic programs and has won several Emmy awards.

David Cahill, police chief, arrested Furlong in March, after an investigation that took almost one year. Because the incident involved possible election fraud, the chief worked with the state attorney general’s office and Assistant Attorney General Brian W. Buonamano.

The investigation began in March 2016 after resident Don Bettencourt reported that an email that was written by his wife Jan Bettencourt to a friend had apparently been altered and forwarded on to other residents just days before the school board elections.

The changes made Jan Bettencourt, who was running against two other candidates to fill two vacant school board seats, made her “look bad” by attributing disparaging remarks to her about someone who was seeking a different school board position: “I seriously question (her) integrity or motives,” were some of the added words. “Is this a popularity contest for her?”

The altered email went out while many people were enjoying a local basketball game and the caused an “immediate backlash against her,” Jan Bettencourt said.

At the time, Furlong’s wife Heather Furlong and another candidate were running with Jan Bettencourt, hoping to fill two vacant seats on the Sunapee school board. Heather Furlong and the other candidate were elected but Jan Bettencourt came in third. (Heather Furlong resigned after her husband’s arrest.)

“After the Chief literally threatened that he would send Mr. Gaw to jail, Mr. Gaw broke down,” and implicated Furlong, according to the court document.

 

In March 2017, Joseph Furlong was arrested and charged with six counts related to forgery and making a false statement to the police. An alleged accomplice, Adam Gaw of Manchester, was also arrested and charged in the case.

Last month, the original charges against Furlong were dropped and the three newer ones instituted. Days later, his lawyer, James D. Rosenberg of Shaheen & Gordon of Concord, asked the court to dismiss all the charges because the new ones reflected a new legal approach, and Furlong was not properly notified of the switch in a timely manner.

The newer charges, according to Rosenberg, claim that it was Gaw, not Furlong, who sent out the doctored email, and that Furlong was only an accomplice.

In addition, Gaw’s confession that Furlong had played a role in doctoring and sending out the email was in question, according to Rosenberg.

The Manchester man made the connection only after Chief Cahill “engaged in blistering interrogation of Mr. Gaw, urging him to implicate (Furlong), and stating things like: ‘I have a hard time believing that you masterminded this whole thing;” ‘‘You’re taking the fall for somebody, and you’re digging a hole deeper for yourself, creating more problems for yourself”; and ‘You’re going to jail for this, do you understand that?’”

“After the Chief literally threatened that he would send Mr. Gaw to jail, Mr. Gaw broke down,” and implicated Furlong, according to the court document.

In fact, Furlong was not even with Gaw when the email was sent out because he was at a business dinner with Brain Gurry in New London, talking about the American Builder television program, according to the lawyer. When Furlong arrived home afterwards, he found Gaw and some other acquaintances talking about the email and, “(Furlong) discouraged Adam from sending the email.”

The trial’s list of witnesses includes a David Gaw of Manchester, but no one named “Adam Gaw.” It also includes Chief Cahill, Jan Bettencourt and several other residents.

Chief Cahill’s report paints a different version of Furlong’s actions around the same time. Town residents reported several interactions with the local man in the days after the email was sent. One recalled Furlong telling him about an acquaintance who “could have intercepted, altered and forwarded the email while under the influence of some wine.”

Another said Joseph Furlong showed up at her house and asked to see a cell phone because there was “something on there that could get him into trouble.”

Around the same time, another resident told Chief Cahill that Furlong called him and confessed to making the email changes. He said Furlong was crying, “nervous and afraid” that his wife would divorce him if he admitted to the actions.

Furlong’s trial is scheduled to begin at 9 a.m. on Friday, Aug. 25, at 9 a.m. in the Newport District Court.

This story first appeared in the InterTown Record of Sutton, New Hampshire, on Tuesday, August 22, 2017.

On Tuesday, August 22, 2017, Judge Gregory E. Michael of the Newport District Court issued a ruling dismissing all charges against Joseph Furlong. A follow-up story explaining the ruling will appear next week in the InterTown Record and on GraniteBeneathMyFeet.wordprss.com

 

Unusual agreement seals Odd Fellows building sale to local contractor

By Ray Carbone

WARNER – It took some creativity, but the town finally sold its historic Odd Fellows building to a local contractor who hopes to renovate and restore the structure.

On Aug. 1, the selectmen signed a purchase-and-sales agreement with Nate Burrington. The Warner native and the owner of Burlington Builders and Maintenance will purchase the 125-year-old wooden village building for $10. Burrington wants to convert the 72’-by-42’, three-story landmark into a combination workshop and office for his business, and rent space for office and/or residential apartments.

‘Selectboard Chairman John Dabuliewicz admitted that the town has lost some legal leverage in the agreement.’

 

Burrington first approached the selectmen about taking over the former fraternal meeting place more than six months ago. The town bought the building in 1999 for $50,000 with hopes that it could renovate it into commercial space, or repurpose it for elderly or workforce housing. After none of several such proposals worked out (and environmental issues were discovered on the property) residents were enthusiastic about Burrington’s unusual offer to take over the project and restore it at his own costs.

The idea was addressed at the annual town meeting in March and the selectmen indicated that they expected an agreement would be forthcoming.

Kimberley Edelmann, selectman, said negotiations became complicated. “Whenever you deal with a board, it takes a while because we can’t decide anything except when we’re in an (official) meeting,” she explained.

The selectman wanted some assurance that important restoration work, which includes structural and environmental remediation, would be done in a timely manner. They created a schedule of improvements with deadlines stretching out two years as part of the agreement. If Burrington didn’t comply, the town could retake the building – something it did not really want to do.

(The board was also interested in safeguarding the town’s investment in the property, which has grown to $80,000 as it handled various problems associated with the land since 1999.)

For his part, Burrington was hesitant to commit to a schedule, said Edelmann. If significant complications arose, from personal to international economic challenges, he would lose his initial investment when the town took the building back, she explained.

Finally, Edelmann suggested that the board change the schedule from one that was required to something Burrington would aspire to complete. In addition, a clause stipulates that if Burrington sells or passes on the landmark, the town will receive $80,000.

Edelmann said the agreement is somewhat unusual but seems to satisfy most of the concerns of both sides.

Chairman John Dabuliewicz admitted at a recent selectmen’s meeting that the town has lost some legal leverage in the agreement, but Edelmann pointed out that the Odd Fellows building would no longer be a municipal obligation.

This story first appeared in the InterTown Record, Tuesday, August 15, 2017.

 

MadgeTech wins legal fight; firing range decision will be reviewed by ZBA

Some Hopkinton residents are concerned about having a firing range near the Hopkinton Middle High School. They may be able to address the Warner zoning board of adjustment about the issue next month. (Ray Carbone/photo)

By Ray Carbone

WARNER – The founder and president of MadgeTech, Inc., the town’s largest high-tech employer, has won a significant legal victory in his efforts to derail the construction of a proposed indoor shooting range on land adjacent to his plant’s property in the Davisville area.

In a decision handed down last month, Judge Richard McNamara of the Merrimack Superior Court ruled that the town’s zoning board of adjustment acted improperly in March when it OK’ed a variance to its zoning regulations that would allow for the construction of the gun facility. The ruling, which was made in response to a legal request from Norman Carlson of MadgeTech, means that the approval is invalid and the ZBA will have to hold a new hearing to reconsider the proposal.

The ZBA’s next scheduled meeting is September 13. No agenda has yet been posted but Chairman Rick Davies has indicated that the plans for the $1.4-million shooting range and gun retail store will be reconsidered at that time.

The ruling does not mean that Hopkinton neighbors will be able to address the ZBA… (only) that the board must consider the question of whether (the project) has regional impact…

The court decision is a setback for both Eric Miller of Sutton, who hopes to build Dragonfly Ranges on a 2.9-acre lot adjacent to MadgeTech’s plant, and for the town, which opposes Carlson’s efforts to derail the plan. Carlson claims his employees have safety concerns about the facility, and said he’ll move his company out of town if the shooting range is built at the currently proposed site.

The court’s action came after Carlson’s lawyers argued that the ZBA should have considered whether Dragonfly’s project would have a regional impact, and therefore allowed both local Hopkinton residents and representatives of the Central New Hampshire Regional Planning Commission to address their concerns before making its March decision.

In addition, the board should have notified all abutters – including the state’s Department of Transportation and its Division of Forests and Lands – before the hearing to allow representatives of the two organizations to express concerns to the board.

(In a separate action, a couple that rents a small home on the MadgeTech’s land argued that they also should have been notified about the March ZBA hearing and allowed to discuss their concerns about the project.)

The town objected, saying that while no official notification was given to the state agencies, they were aware of the building proposal and had offered no objections. In fact, when the town’s planning board considered Dragonfly’s proposal in June, it invited input from both agencies, and neither indicated that it had any concerns about the project.

The judge’s ruling does not mean that Hopkinton neighbors or the commission representatives will be able to address the ZBA. It simply means that the board must consider the question of whether the project is of regional interest and, if so, allow others to speak at a public hearing.

The decision will also require that the renters be notified in advance of the next hearing and that the two state agencies that own land next to the proposed gun range be notified beforehand.

It’s unclear how the court ruling impacts the planning board’s June approval. If the ZBA reaffirms its March decision on the same grounds, it’s likely that the planners’ decision would stand. But if the case moves in another direction – that is, if information about the possibility of excessive noise or potential pollution concerns are reviewed – then town officials may recommend that the planning board rehear Dragonfly’s application after a ZBA approval.

This story first appeared in the InterTown Record of Sutton, N.H., on Tuesday, Aug. 15, 2017.

 

Construction begins on Warner shooting range project

By Ray Carbone

WARNER – Eric Miller, the Sutton resident who wants to build a $1.4-million, 11,800 square-foot shooting range and retail gun store on Warner Road attended a hearing in the Merrimack County Superior Court several weeks ago. Afterwards, he said he would wait until Judge Richard McNamara had ruled on several appeals from Miller’s abutters before moving ahead with any construction plans. But the entrepreneur had a change of heart.

Miller recently completed the purchase of the 2.9-acre property adjacent to MadgTech, Inc., near exit 7 off Interstate 89, and construction work has already begun on the land.

“If (town officials) are making that kind of commitment, then I need to make an equal amount of commitment to the project.”

– Eric Miller, owner of planed retail gun store/shooting range

 

“I spent a lot of time analyzing all the potential (legal) outcomes and realized that there isn’t really a scenario where I can’t hopefully be able to build,” he said late last week. “I’ve looked at this from every angleand decided that this is worth making this investment… So I pulled the trigger.”

The recent court actions involved appeals from Norman Carlson, the founder and CEO of MadgeTech, Inc., the town’s largest high-tech employer, to halt Miller’s project. Carlson says his employees feel the business will pose a danger to their safety, and he’s threatened to move his 50-plus-workers plant out of town if the project is constructed next to the company land. (In recent weeks, Carlson has been unavailable for comment.)

Earlier this year, both the planning board and the zoning board of adjustment approved Miller’s building proposal. Now, town officials are opposing Carlson’s efforts to have the judge toss out those decisions.

In the Concord superior court last month, Carlson and a couple that rents out a small house on his property asked the court to legally halt Miller’s project. Attorneys argued that the couple was not properly notified by the town about the two land boards’ hearings, and that other legal requirements had not been met. Both Miller’s attorney and the town’s refuted the claims.

However the town officials did ask the judge to order that the ZBA reconvene its public hearing, although only to specifically consider the question of whether the shooting range/gun store facility could be considered to have a regional impact. If it does, some Hopkinton residents who have expressed concerns about the location of the facility, just three miles from Hopkinton Middle High School, as well as representatives of the Central New Hampshire Planning Commission would be allowed to address the zoning board.

The Hopkinton residents (and other people with ties to the area) say they’re concerned about noise from the gallery and the possibility that lead from firearms and ammunition could somehow find its way into the local water supply. Representatives of the planning commission raised concerns about traffic in the neighborhood. Those concerns were discussed at the planning board hearing, but the board members decided that Miller’s plans were sufficient.

On Friday, Miller said that he completed his purchase of the 2.7-acre lot adjacent the Davisville State Forest on Monday, July 17, and that he hired a company to begin preparing the land for construction later that week. He had signed a purchase-and-sales agreement with Richard M. George of Webster earlier this year after Webster outbid Carlson for the land, which was formerly part of the forest.

Miller said that he was especially motivated to move forward with his construction plans after receiving a recent email from Warner officials indicating that they intended to continue their vigorous defense of the two land boards’ rulings.

“So, I thought, if they’re making that kind of commitment, then I needed to make an equal amount of commitment to the project,” Miller said.

Miller said that he’s spent more than $10,000 on legal fees related to the dispute so far, and he expects to spend more in the future.

This story first appeared in the InterTown Record of Sutton, N.H., on Tuesday, Aug. 1, 2017

 

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