Because of Rachel Lithgow and her Victorian home in North Buffalo, prosecutors are back on the trail of a businessman who owes New York State more than $2.7 million.
The state Attorney General's Office has served David W. Tomasello with a subpoena that orders him to reveal his assets and revives a 4-year-old judgment against him, now that he has returned to New York.
Tomasello, who owned Tomasello Contracting Corp. and Lake Front Recycling, owes the state $2.7 million in fines for running what state officials called an illegal dump in Lackawanna. The Department of Environmental Conservation and the Attorney General's Office, when led by Andrew M. Cuomo, obtained the judgment against the businessman in 2008.
Lake Front Recycling violated multiple laws as it took in more than 31,000 tons of waste at the site on North Steelawanna Avenue, the DEC said. Though Tomasello argued it was just wood scrap destined for recycling, he was fined and banned from the garbage business in New York for his "callous and brazen disregard" for the law and the environment, Cuomo said in 2008.
By then, Tomasello had moved to North Carolina to follow other business interests. New York prosecutors, without jurisdiction there, left Tomasello alone as he became involved in a NASCAR racing team and a clothing line pitched by Hugh Hefner-playmate Kendra Wilkinson. More recently he founded Wave Energy Drink LLC, a company he said he intended to move to the Buffalo area.
Step one was to find a home for his family. But the saga that unfolded with Tomasello and the Lithgow house in North Buffalo became a cautionary tale for real estate professionals everywhere, as well as for sellers who expect agents to vet clients for their ability to buy.
As a chief executive officer looking to relocate a company here, Tomasello captured the confidence of local agents in a way they now regret. Only when his arrangement to lease and then buy an expensive home fell apart did the details about his inability to buy tumble out.
Tomasello presented himself as a man of deep resources bringing a company and jobs to Western New York. But he not only faced New York's $2.7 million judgment, he was being sued in North Carolina for more than $1 million.
Wave Energy Drink's biggest lenders -- its chief financial officer and the officer's grandmother -- allege that he used their loans not to bottle more energy drink but to finance his lifestyle. While Tomasello accuses his chief financial officer of wrongdoing, Wave Energy Drink LLC was in distress.
The deal sours
In returning to their Buffalo-area roots, Tomasello and his wife -- graduates of Hamburg High School -- selected a house they had seen only in pictures: 67 Beard Ave., a seven-bedroom Victorian for sale at the corner of Buffalo's Voorhees Avenue. The home was vacant because owners Ian and Rachel Lithgow had moved to Philadelphia.
In late December, David Tomasello signed papers to buy the house for $329,900 -- but not until the end of 2012. He would first lease it for a year because he needed to sell his more than 5,000-square-foot house, worth some $1.5 million, in Mooresville, N.C.
At least that's what Lithgow and the real estate agents were led to believe.
The deal for 67 Beard soured almost immediately. The Tomasellos moved in -- early in January -- before Tomasello signed a second lease agreement prepared by the Lithgows' attorney, according to Rachel Lithgow and the lawyer, Jennifer A. Hurley. Hurley had imposed some extra conditions, and Tomasello never accepted them before entering the house with the key his agent took from the lock box.
Attempts to resolve the snag failed, and Lithgow eventually filed papers to evict the Tomasellos. In response, Tomasello withheld further $2,500-a-month payments because, he told Lithgow, the house was in poor condition.
Lithgow figures the two-month encounter with Tomasello cost the couple more than $20,000 and kept the house off the market during that time. Plus, it's not over.
Tomasello has filed papers signaling he will appeal the court order that he surrender more than $2,000 to Lithgow. Also, before leaving the house, Tomasello had a city housing inspector write up a number of violations.
During the eviction process, Rachel Lithgow and Hurley looked into Tomasello's past and found, among other things, the state's $2.7 million penalty that had gone unpaid.
From house to house
Hurley contacted the attorney general's people in Buffalo and piqued the interest of Paul McCarthy, an assistant attorney general, by telling him Tomasello was back in New York. Emails between Hurley and McCarthy indicate McCarthy drove by the house for a look and spotted some Wave Energy Drink vehicles. In time, state personnel served Tomasello at 67 Beard with an "information subpoena," seeking details about his assets.
Then came another huge finding. Lithgow's real estate agent, Matthew Quagliano, found that Tomasello did not own the house in North Carolina that seemed to prevent his immediate purchase of 67 Beard, Quagliano said.
Tomasello had been renting the North Carolina house -- with five full bathrooms, an in-ground pool and commanding view of a golf course -- for just a few months, since June. He had rented another sprawling North Carolina mansion in the months before that.
Tomasello had gone from house to house to house, in less than a year.
He no longer looked like the deep-pocketed businessman that his own real estate agent, "the buyer's agent," had portrayed.
"That individual provided a fairly significant amount of documentation to us to prove that this guy was on the up and up and legitimate," Quagliano said of the buyer's agent. "It turns out after the fact, when everything started to go south, if you will, that a lot of the information that was provided was just outright false and bogus."
The buyer's agent, Jim Mack, doesn't dispute what Quagliano said.
Mack said he was as surprised as everyone to learn that Tomasello wasn't as fit to buy the house as he first appeared.
"I trusted the buyer's credentials as presented to me," Mack said. "But I later found out those credentials were not true."
Tomasello denies ever telling Mack or anyone that he owned the house in Mooresville, N.C. But at least one of his emails shows he did just that:
"If we like the home we plan on purchasing it anyway, so a contract is OK by me," he told Mack in one of the exchanges that led to the lease-and-purchase documents. "I will not even list or show my $1.5 million dollar home until we move out "
With Tomasello facing New York's $2.7 million fine, as well as other liens and claims in North Carolina, Lithgow is angry that Mack presented Tomasello as a solid buyer. She has learned that when forced to undergo a credit check, Tomasello lost interest in a home he wanted to lease on Lexington Avenue with Mack's help. That was before he selected 67 Beard.
Lithgow says she never would have entertained a request to lease her house for a year without a contract to buy it. She now doubts the businessman ever intended to buy her house.
Indeed, Tomasello told The Buffalo News that he was not trying to buy a house -- at least not in his name.
"I personally was not trying to buy a home whatsoever I don't know why my 'David Tomasello' keeps on coming into play," he said of his name, "because I don't have the means to buy a home."
He had signed the documents to lease and buy 67 Beard Ave. in care of the "Tomasello Family Trust," for which neither he nor his wife is trustee. He refused to identify the person who holds the title of trustee, and he said he's not sure the trust has the means to buy a house either.
"Quite frankly, we wanted to lease the home," he said.
Then why did he sign a purchase contract?
It was a negotiating tool, he said, to freeze the price at $329,900 should the family trust want to buy the house at the end of 2012.
He was not, he insisted, trying to keep the state off his trail by securing real estate in a name other than his own.
"It isn't a fact of me trying to 'hide from the government' or anything like that," Tomasello said. "I have never hid. You can Google me and see me all over the place since 2008. It's not like I am trying to hide from anybody or do anything dishonest. I am as above board as above board can be."
The Lackawanna site
As for the subpoena, Tomasello says he's not fazed by the state's newfound interest in him. He said that through a lawyer he has asked state prosecutors to more specifically detail the list of documents they want him to turn over, and he will do so.
"I just want to do what's right, go in and get this issue resolved, and move on," he told The News.
Tomasello in 2008 had vowed to appeal the $2.7 million judgment but never did.
If the 16-acre site does present a public nuisance, the state has allowed the nuisance to exist for years. The piles of scrap wood -- pallets, brush from parklands and waste wood from construction sites -- have been left to rot on the barren site in Lackawanna. The mounds are visible from the bridge that takes Ridge Road over railroad tracks.
James E. Greene of Orchard Park figures the wood could fetch a fine price for someone willing to grind it down and sell it as mulch.
"I don't know how the state got the idea that there are hazardous materials there, or it's a hazardous location, because it really isn't," said Greene, who is Tomasello's father-in-law and served as vice president of Lake Front Recycling.
He said Lake Front would sell ground wood to a nearby maker of fiber board that went out of business in the last decade and left the shell of a factory behind. Lake Front Recycling tried to make a go of it by finding other customers but eventually ceased operations. Its land was seized for back taxes.
"There was just an over-abundance of material waiting there with no place to go," Greene said of the remaining wood piles. "It just sat there. A lot of it is still there." He said the state fined Lake Front for letting the wood piles become too high and too dense, and those fines were compounded when they went unpaid.
"The state I guess just looks at it as a dump. That is far from the reality."