Outside counsel warned Oyster Bay officials against backing Singh’s loans

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CENTRAL ISLIP -

Jonathan Sinnreich, who serves as the Town of Oyster Bay’s outside legal counsel, testified in the Mangano-Venditto corruption trial Wednesday that he told town officials on multiple occasions that a municipality cannot legally provide a guarantee for a personal loan.

Sinnreich says Oyster Bay's 2010 plan to guarantee a $1.5 million loan for restaurateur Harendra Singh was "grossly illegal and inappropriate" and says he warned of the public embarrassment the town could face if Singh defaulted on the loan.

Sinnreich told prosecutors that he relayed his concerns in writing to former Deputy Town Attorney Fred Mei, and verbally to then-Town Supervisor John Venditto and then-Deputy Supervisor Len Genova. 

VIDEO: Newsday's Joye Brown on the Oyster Bay loan timeline 

"I thought it was clearly unconstitutional and legally could not be done," Sinnreich testified.

In a February 2010 email presented as evidence, Sinnreich writes to Mei that he can't endorse any plan that provides a guarantee, and in turn leaves the town financially responsible for Singh's personal loan repayment.

"You know that, if I could, I would try to find a way to bless this deal, but I just can't do it," the email states.

MORE: Mei: Being investigated was ‘rite of passage’ in Oyster Bay 

Later in the month, he writes to Mei and Genova about his concern that a Singh default would leave the town, and by extension, its taxpayers on the hook.

"How could we ever explain or justify the loss of public funds?" he wrote.

Mei testified Wednesday that using the town’s creditworthiness to benefit Singh’s personal loans was “John Venditto's idea." 

VIDEO: Newsday's Nicole Fuller on Fred Mei's third day on the stand

Mei and Singh both testified that after Sinnreich refused to back the plan, the town brought in attorneys from the law firm Rivkin Radler to develop a workaround of the state law. Singh ultimately got that first town-backed loan, and many more in the years to come – totaling more than $20 million. In 2016, the town was forced to raise taxes by more than 11 percent after its credit rating sunk to junk bond status following Singh's arrest.

Sinnreich says it wasn't clear what the town was actually getting in exchange for backing Singh's loan. He says Mei told him that Singh would cater something called the “Supervisor's golf outing.”

Sinnreich called the idea of the catering job serving as a justification for backing the loan "ridiculous." He returns to the stand Thursday.

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