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The FBI has reopened its investigation of a Depew boat dealer and a tangle of phony bank loans totaling $1.3 million after agents found two Buffalo parks workers were associated with the dealer.

Late last month, FBI agents working on the Parks Department corruption investigation reopened the case after finding that the dealer listed William Delano, son of Parks Commissioner Robert E. Delano, and another parks worker as borrowers on some of the bad loans. The dealer, John J. Cerullo, has since been convicted.

"I don't consider all of Cerullo's customers innocent," said Drew Tidwell, an attorney who investigated the bad bank loan case for one Buffalo bank.

Cerullo, owner of Transit Marine, 5319 Transit Road, collected $15,000 in "fraudulently secured" retail boat loans from two Buffalo banks in 1984 by naming William Delano as the borrower, according to an FBI report.

Another $90,000 worth of bad loans also were arranged in the names of parks worker James Wojcik and three of his family members. One of them was Cerullo's wife, Rosalie, Wojcik's sister. James Wojcik is a Delano family friend, parks workers say, and worked at Cerullo's boat dealership.

William Delano also obtained boats and trailers from Cerullo between 1982 and 1984 state records show.

The FBI investigation of the fraud was dropped three years ago after a judge ruled against prosecutors in a pretrial hearing and agents were needed to work on other cases. Cerullo, 52, pleaded guilty in 1987 to mail fraud and making false loan statements and spent two years in a federal prison.

Six Buffalo banks took large losses from the scheme, which also involved dozens of Cerullo's friends, family members and employees, who were named as borrowers on more than 70 phony retail boat loans.

Cerullo made up boat sales in some cases and submitted bogus loan applications in the names of people he knew. He also arranged some loans in the names of people who came into his store shopping for boats, using their Social Security numbers and other information he obtained about them.

Many of those listed on loan papers later claimed their names were forged and they knew nothing about the boat purchases. Investigators said these people recalled complaining to Cerullo about receiving bank payment books in the mail for boats they did not purchase. But none of them reported the fake purchases to the banks, investigators said.

"I find it incomprehensible that all these people returned their loan payment books to Cerullo when they got them in the mail and then said they were innocent of what was going on," Tidwell said.

Bank investigators believe some of Cerullo's customers knew what he was doing and cooperated with him in duping the banks for almost five years, Tidwell said. Cerullo used the payment books returned to him to conceal the fraud from lenders, who did not catch on because he began making payments on boats himself.

In 1982, William Delano obtained a 14-foot fishing boat, equipped with a trailer and outboard motor from Cerullo's store, state records show. At the time, the boat was worth about $2,000, and Delano, then 19, was a college student employed as a $15,000-a-year city laborer.

Records show William Delano transferred the boat's registration to Mayor Griffin in 1984, indicating that Griffin then became the new owner.

It is not clear from state registration records how William Delano obtained the boat from Cerullo, or whether he sold or gave the boat to the mayor. Similarly, no evidence could be found that Griffin's boat was used by Cerullo in his loan scheme.

Griffin -- who apparently never dealt with the boat dealer -- sold the boat in mid 1988 to a Cheektowaga man who described himself as Griffin's friend. The Buffalo News reported allegations Thursday that Parks Department workers, under orders from Robert Delano, worked on his friends' lawn mowers, power saws and other equipment. Among the equipment, employees said, was the boat engine Griffin had rebuilt just prior to its sale in 1988.

Neither the mayor nor either Delano returned telephone calls seeking their comment on the boat or the engine.

William Delano would not speak to bank investigators in 1985 about loans naming him, so it could not be determined what he knew about Cerullo's activities, Tidwell added.

Wojcik -- in a 1985 interview with bank investigators -- admitted that he "may have given Cerullo a copy of his W-2 form," a federal income tax record, from which Cerullo could have gotten information for two phony loan applications. Wojcik claimed he was only helping the dealer compete in a boat sales contest. He said he did not know Cerullo was intending to apply for loans.

William Delano, 26, now a rookie Buffalo police officer, was identified by two former boat store workers as a close friend of Cerullo's son, Emil. According to bank investigators, Emil and other Cerullo family members helped him make monthly payments on phony loans. None was charged in the scheme.

Neither Cerullo nor his son, who have moved to Texas, returned calls seeking their comment. The elder Cerullo was released last year after serving two years of a five-year prison sentence.

Scores of uncollected loans were written off the books by the six banks after Cerullo's guilty plea, according to spokesmen. Bank spokesmen said the banks involved did not wish to comment on the Cerullo case.

As another outcome, state officials reformed the state's system of boat registrations to require titles, similar to auto titles, lawyers said. Cerullo's scheme was made easier because there were no titles with which to trace ownership, Tidwell said.

Tidwell and others said some new and used boats believed to have been involved in the loan scheme are missing. The FBI has received reports from parks workers that there are privately owned boats parked in some Parks Department garages.

The investigation of Cerullo began late in 1984 when a suburban man complained to bankers that he was being asked to make loan payments for a boat that he never bought.

After Cerullo's indictment, he agreed to give FBI agents information to assist their investigation as part of a plea-bargaining arrangement.

However, during a June 1, 1987 meeting, Cerullo insisted to agents that he acted alone and refused to say who else may have been involved.

According to an eight-page report of the interview filed in federal court, FBI agents told Cerullo they found his statements "highly improbable." Cerullo and his attorney, Joel Daniels, refused agents' requests for a lie detector test to back Cerullo's claims.

Prosecutors then asked U.S. District Court Judge John Curtin to void the plea bargain and order Cerullo to trial because of the lack of cooperation. But Curtin refused and criticized the banks for their lending practices.

As a result, sources close to the case said, FBI agents were forced to drop the investigation, leaving behind a tangle of fraudulent loans, investigative leads, and potential witnesses who were never interviewed. Included were William Delano, James Wojcik and dozens of persons named by Cerullo on boat loans, officials said.

When Cerullo was convicted, federal prosecutors said they thought customers named on his loans were innocent because they claimed they were not aware of what he was doing.

According to what Cerullo told agents, he sometimes arranged two loans for the same boat sales, altered other boat serial numbers, and resold trade-in boats without settling loans that had been granted on them.

When asked about one loan naming him, William Delano told bank investigators through an attorney that his name had been forged to loan papers, apparently by Cerullo.

State and county records show William Delano's name appeared on five dealings involving Transit Marine between 1982 and and 1984.

Among them were the following:

In early 1985, Delano registered with the state as the owner of a 1984 Tee Nee boat trailer. But later that year, the same trailer turned up at Cerullo's store, where Bruce R. Royer of Lockport bought it.

Royer said that the store sold him the trailer as new when he closed a deal for an 18-foot boat and outboard motor.

In June 1982. Delano registered as the owner of a used, 1980 Sylvan 14-foot metal fishing boat with a trailer and a 15 horsepower outboard motor worth about $2,000. Delano transferred the boat's registration in mid-1984 to Mayor Griffin, state records show. Griffin's registration was in effect for about three years until he sold the boat in 1988 to David B. Pawlowski of Cheektowaga.

Pawlowski, who said he is a friend of Griffin's, said he didn't want to discuss the boat or how he obtained it.

In mid-1984, Delano bought a 16-foot Sylvan fiberglass boat with a 120 horsepower inboard/outboard engine and a trailer. He transferred the boat last year to parks worker Joseph Staszczyk and Dennis J. Wojcik, brother of James Wojcik, records show.

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