Thomas MacMillan File Photo
Reyes: Feds “have their head up their ass.”
Federal and state investigators have visited several city government offices this week in their continuing probe into politically connected Fair Haven developer Angelo Reyes.
FBI Special Agent Jim McGoey and state police Sgt. Michael Pendleton sought information about Reyes’ dealings with city government on property he is accused of having torched.
Their inquiries at the offices of the city clerk, the building department, and the corporation counsel followed a new indictment issued by a federal grand jury accusing Reyes of arranging to have two Fair Haven properties burned to make way for development plans, adding to previous indictments concerning two other buildings. Reyes, who has worked on mayoral and aldermanic campaigns in past years, continues to deny the accusations.
“I learned about the visit to City Hall this morning,” Mayor John DeStefano said Thursday afternoon. “I’m not specifically aware of what they’re looking for.” DeStefano said that the feds have never contacted him in connection with their years-long probe of Reyes.
Mayoral spokeswoman Elizabeth Benton said the city has not received any subpoenas from the case this week.
City Corporation Counsel Victor Bolden, who is in Las Vegas, issued this statement: “As everyone in New Haven knows there are ongoing proceedings involving Angelo Reyes, the city will provide information requested of it by the federal government, to the extent practicable. Beyond that, the city will not be commenting further on this matter and will allow the federal government to complete its work.”
Assistant Corporation Counsel James DelVisco met with the agents on Wednesday, according to Benton.
Meanwhile, in a conversation Thursday, Reyes denied the allegations against him and said the feds are “barking up the wrong tree” if they’re looking to tie any allegations against him to City Hall.
“They have their head up their ass,” Reyes said of the feds.
$24,000 Loan Scrutinized
Allan Appel Photo
137 Lloyd.
The new indictment (read it here) devotes extensive space to Reyes’ dealings with city government’s neighborhood anti-blight agency, Livable City Initiative (LCI), in connection with 137 and 139 Lloyd St. The indictment charges Reyes arranged to have 139 burned down because he owned a landlocked piece of property behind it and needed street access to develop it. Two firefighters were injured in that Sept. 19, 2002, fire. Reyes eventually built a multi-family home on the previously landlocked property.
The indictment details how LCI sold the property to Reyes and gave Reyes a $24,000 interest-free loan in 2003 to abate lead paint at 139 Lloyd. Like other such loans, it was to be forgiven if the owner stayed in the property for five years.
The indictment then notes that Reyes got a modification from LCI to switch the address of record for the loan to 137 Lloyd. He owned that property, too.
He then sold that property in 2004 to “an individual … known to the grand jury but not named herein,” the indictment states. (Land records identify the buyer as Nilda Aponte.)
The city then agreed to allow the buyer to assume responsibility for the $24,000 loan. The city also agreed to take a subordinate position on that loan to a separate $150,000 mortgage the buyer took out on the property.
The indictment notes that the five-year $24,000 loan expired in 2008 “without anyone have to pay the money back.”
The indictment states that Reyes had a scheme to “defraud the City of New Haven.” It also notes that when Reyes deposited the $24,000 loan check at the old New Haven Savings Bank, processing of the check (written on the city’s account at First Union Bank) included “the electronic processing of debts and credits through the Federal Reserve. Because there is and was no Federal Reserve in Connecticut, the transaction caused wire transactions to occur out of Connecticut.” That in part enabled the feds to add an additional federal charge in the indictment: wire fraud in violation of Title 18 of the U.S. Code.
Reyes’ Side
Allan Appel Photo
139 Lloyd.
“This is where they have their head up their ass,” Reyes said when asked about the lead abatement loan.
He said the reason LCI changed the address on the loan from 139 to 137 Lloyd was that a secretary had made a mistake in the original loan document. The loan was always supposed to be for 137, not 139, he claimed.
“I was going to knock down 137 to get to the back [landlocked lot he owned]. But then I changed my mind when there were [government abatement] programs available. I was into homeownership. Why demolish a house if you didn’t need to?” he said.
Reyes got the lead paint grant for 137, he said, and fixed it up and resold it instead of tearing it down.
He also said there was nothing sinister in Aponte assuming the loan rather than the city calling in the money based on Reyes’ selling the property. “A loan is transferable to the new owner. It’s a lead abatement grant. As long as you did the work on the property, it can be transferred to the new owner,” Reyes said.
Reached Thursday, Aponte confirmed that she still lives in the house.
More broadly, Reyes repeated his contention that another man torched all the houses he was accused of arranging to burn down. “These two individuals [on whom the feds have built much of the case against him] would say I burned down the Twin Towers. They have no case,” he said of the feds. “I had no insurance,” a contention the federal indictments in the case have contradicted.
Reyes said he has heard indirectly, but not firsthand from the feds, that he should think about “cooperating” with a broader FBI probe into City Hall corruption.
“Even if they approached me, they’re barking up the wrong tree, ” he said. “I’ve done nothing wrong. I’m confident I’ve done nothing wrong. I assure you that the city of New Haven and LCI have nothing to do with my life” or any alleged wrongdoing.
After his People’s Laundromat on Lombard Street went up in flames in 2009, Reyes told the Independent in an emotional interview that he was a victim, not a perpetrator, of arson. Click on the play arrow to watch.
The latest FBI visits have an historical parallel. In 1998 the FBI raided LCI and City Hall after a news account was published about a lead abatement loan given to a top mayoral aide. Further revelations about alleged unethical lending lead to the immediate departure of three top mayoral aides and an LCI shake-up. However the feds never brought any criminal charges.