Two Guilty Pleas and Three More Federal Indictments in Kodak Fraud

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*December 8, 2005 – *Three players involved in the Kodak tax appraisal scheme in Greece, NY, were indicted by a federal grand jury today on 42 counts for interfering with commerce, mail and wire fraud, and money laundering.

Charles A. Scwab, the town’s assessor, and John Nicolo, a local appraiser, are accused of conspiring to deflate the value of Kodak-owned property in Greece, New York, a Rochester suburb, in exchange for kickbacks. The false assessments resulted in lower property taxes for the corporate giant and at least $4 million in lost tax revenue for the town of Greece.

In addition to the Kodak assessment scheme, today’s indictment also alleges that Nicolo was involved in lowering property value for IBM Global Services, who also owns property in Greece, NY. Mark Camarata, a former Kodak tax executive, who has already plead guilty to giving appraisal contracts to Nicolo in exchange for kickbacks and for bribing Scwab, also plead guilty to persuading IBM officials to hire Nicolo for the same purpose. Camarata has been cooperating with authorities and may be responsible for shedding light on the IBM assessment scheme.

David Finnman, the third indicted man today, was the property tax manager of IBM Global Service in Greece at the time, after leaving his position at Kodak. He is accused of taking kickbacks from Nicolo in return for hiring him to appraise on behalf of IBM Global Services.

Schwab, Niccolo, and Finnman will be arraigned on December 16th as scheduled by U.S. Magistrate Judge Jonathan Feldman. Attorneys for each of the men say that their clients are not guilty.

While Nicolo is planning to plead guilty, Nicolo’s attorney asserts that payments made to Schwab were not kickbacks, but legal payment for appraisal services; since in addition to his position as the town’s assessor, Scwab also owned an appraisal business.

Richard Ackerman, a Yates County appraiser, has already plead guilty to being involved in the Kodak tax assessment fixing scheme and is cooperating with authorities. Dale H. Durley, a tax consultant that was doing work for Kodak at the time, is also scheduled to plead guilty to giving Camarata kickbacks.

Kodak claims to be a victim in all of this and filed a civil racketeering lawsuit against all 3 players in addition to 21 additional parties in August 2005. However, Kodak also alleges that they have also been a victim of artificially inflated value overall from the town of Greece, New York paying $14 million in inflated taxes over the last 13 years. Kodak is the largest employer and corporate taxpayer in Greece and is in reappraisal negotiations of their property with the town.

These last three indictments signal that unless plea deals are reached with the prosecutor, the case will go to trial.

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