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Ex-Buffalo official spared jail in gratuities-linked tax case

Buffalo's former acting public works commissioner will have to pay fines and perform community service after admitting he evaded taxes when he took gifts from firms that do business with the city.

But a judge spared Daniel E. Kreuz from serving jail time and agreed to give him a conditional discharge if he does community service and leads a law-abiding life for a year.

Andrew C. LoTempio, Kreuz's attorney and longtime friend, lashed out at Mayor Byron W. Brown on Monday for firing Kreuz instead of demoting him from his top job in the Public Works Department. The mayor, LoTempio contended, "caved under public pressure" in August when he fired Kreuz, who, before entering the plea, had been told he would be demoted -- not terminated.

"I find it somewhat shameful that [Kreuz] was made an example of here," LoTempio said.

But Erie County District Attorney Frank J. Clark said he thinks Brown's action was appropriate.

"Do I feel it was unduly harsh for somebody to break the law and violate a public trust, [then] lose his job? I think that it was fitting. I don't think it was harsh," Clark said.

Brown deferred all comments to Corporation Counsel Alisa A. Lukasiewicz, who said the remarks by Kreuz's lawyer must be put into perspective.

"Mr. LoTempio is an advocate for his client. As corporation counsel, I'm an advocate for upholding our code of ethics and upholding the public trust," she said. "Mr. Kreuz violated that trust."

Erie County Judge Thomas P. Franczyk ordered Kreuz to perform 200 hours community service and pay fines and fees totaling $1,160. Franczyk could have sentenced Kreuz to up to a year in jail. He said he considered the fact that Kreuz cooperated with investigators in a two-year probe. The judge added that he received letters from 30 people attesting to Kreuz's character.

Attorneys said Kreuz already had paid state and federal taxes he owed on the gratuities. Officials said the tax liabilities amounted to about $1,300.

Kreuz, a city employee for 29 years, pleaded guilty to a misdemeanor charge of accepting trips and meals from city vendors without paying taxes on them. The offenses occurred over a three-year period when Kreuz served as city engineer under then-Mayor Anthony M. Masiello.

Brown later named Kreuz acting public works commissioner, succeeding Joseph N. Giambra upon his retirement. Giambra later pleaded guilty to taking numerous contractor-financed trips. He was sentenced to three years' probation, ordered to perform community service and pay a fine.

Kreuz has since landed a job in the private sector, LoTempio said. But he claimed his client's termination from city government was an injustice.

LoTempio speculated that people in the private sector fail to declare meals and other gratuities on their income tax returns. He also alluded to lax city policies at the time of the trips in 2003 and 2005. Officials must report gratuities on ethics disclosure forms.

"The fact that it was a long-standing practice doesn't make it right," Clark said in response to LoTempio's argument that Kreuz was only doing what others had done.

Kreuz has filed two grievances seeking reinstatement to a civil service job in city government, The Buffalo News has learned. But the Brown administration has denied his requests.

"He was terminated for cause, so he forfeited his right to [employment] with the city," Lukasiewicz said.

The criminal probe is continuing, Clark said Monday. Investigators now are focusing on someone who previously worked for a company that did business with the city and played a key role in arranging trips and other gratuities for some city officials.

City Comptroller Andrew A. SanFilippo, meanwhile, said his office will set up a fraud hotline by the end of December. Whistle-blowers would be able to call in confidential tips about alleged abuses.

SanFilippo said people also will be able to forward such information via the city's Web site. The comptroller announced the plan in September, shortly after Brown proposed a similar fraud tip line as part of the mayor's broader plan to hire an inspector general.


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