For five years, federal, state and county prosecutors combed through the campaign finance records of former State Sen. George D. Maziarz, looking for evidence of crimes.
FBI agents scoured campaign funds and interviewed Maziarz's staff, campaign treasurer and his political associates about hundreds of thousands of dollars in campaign spending.
No one has been charged with stealing a dime.
After years of review, a question remains: What happened to hundreds of thousands of dollars of questionable spending flagged by the state Board of Elections for prosecutors to review?
Maziarz accuses his former chief of staff and campaign treasurer, and a few lower-level staff members, of stealing more than $350,000 in political contributions to his campaign.
State and federal prosecutors passed on the case, however. So did the Erie County District Attorney's Office.
But Maziarz, who pleaded guilty last month to an unrelated misdemeanor election law violation, is not giving up. His defense attorneys hired forensic auditors to trace where his campaign funds ended up. The audit described more than $650,000 in checks and debit card purchases as "questionable."
Among their findings: More than $18,600 in campaign money was spent on school activities and sports teams associated with the children of his chief of staff and campaign treasurer. More than $42,000 was spent at Target. Thousands were spent on Time Warner Cable bills at the treasurer's house. About $8,300 was spent on photos sent to Shutterfly, an online publishing service.
The state Board of Elections in 2015 also flagged 329 checks made payable to cash, large numbers of unitemized transactions and campaign finance statements that falsely reported or failed to report numerous expenditures.
Lawyers for Maziarz's former chief of staff Alisa Colatarci-Reimann and former campaign treasurer Laureen M. Jacobs say they did nothing wrong in their handling of campaign funds.
Erie County District Attorney John J. Flynn said his office saw insufficient evidence to prosecute anyone.
"Due to the bookkeeping records that we were provided, we were also unable from a criminal standpoint to determine who benefited from the alleged purchases," Flynn said.
But Flynn said he plans to take another look at the case this month when Maziarz's attorney Joseph M. LaTona returns to his office to present additional information.
"The bottom line here is that while I agree with the premise that where there is smoke there is fire, in this case there clearly is smoke but I am not able to prove beyond a reasonable doubt in a court that there is fire at this time," Flynn said.
It's unusual for campaign finance reports to get this level of scrutiny and even less common for them to end with criminal charges.
"Given (the) number of candidates who run for office each year at the state, county, federal and local levels, prosecutions are rare," said John Conklin, a spokesman for the state Board of Elections.
AG prosecuted Maziarz
Instead of focusing on the Board of Elections' allegation of thefts from Maziarz's campaign funds, the state Attorney General's Office prosecuted Maziarz.
State Attorney General Eric Schneiderman zeroed in on alleged efforts by Maziarz's campaign to hide $95,000 in payments over two years to a former Maziarz campaign worker, Glenn S. Aronow.
Maziarz, who ruled Niagara County Republican politics for decades, was initially charged with five felonies and pleaded guilty to a misdemeanor state campaign finance law crime. He was fined $1,000 and received a conditional discharge March 2 in Albany County Court.
A year ago, Henry F. Wojtaszek, a former close ally of Maziarz, also pleaded guilty to a misdemeanor election law violation and is yet to be sentenced.
With his case behind him, Maziarz has started a public quest to get local investigators to pursue the conclusions of forensic auditors hired by him that flagged questionable spending of more than $650,000.
The attorney general, Maziarz said, did not show interest in the forensic audit. It also did not act on concerns raised by the state Board of Elections about more than $200,000 in checks issued from campaign funds to the staff members, campaign treasurer and other individuals, according to Maziarz.
When asked why, Schneiderman's spokesman said the office focused on Maziarz instead.
"We dedicate our resources to prosecuting the top of the organization," said Eric Soufer, a spokesman for Schneiderman. "You have to decide whom you’re going to prosecute."
Maziarz's attorneys had accused the attorney general of "selective prosecution" by ignoring what Maziarz describes as thefts from his campaign funds. A judge rejected the selective prosecution argument in refusing to dismiss charges against Maziarz. Schneiderman argued that any potential larceny charges were the responsibility of prosecutors in Western New York.
Gabriel M. Nugent, the attorney representing Colatarci-Reimann, noted that the Albany Times-Union reported March 21 that the Attorney General's Office "examined the information but declined to pursue a criminal case because it found the undocumented expenditures were due to poor record-keeping and loose spending, not larceny."
That's not true, said Schneiderman's spokesman.
"Our charging decisions did not give a clean bill of health to anyone else. We never actually said there is no crime here," Soufer said.
Other prosecutors investigated
Schneiderman wasn't the only prosecutor to take a pass on prosecuting anyone over alleged thefts from the Maziarz campaign.
Maziarz's campaign fund first came under scrutiny when the state Moreland Commission to Investigate Public Corruption investigated possible crimes involving election law, campaign expenditures and fundraising in 2013.
When Gov. Andrew M. Cuomo disbanded it in March 2014, Manhattan U.S. Attorney Preet Bharara took up the reviews. FBI agents scoured campaign funds and interviewed Maziarz's staff and his political associates.
Maziarz said federal authorities in 2015 were also given a copy of the forensic audit performed by Freed Maxick CPAs, the firm hired by Maziarz to examine campaign expenditures.
James M. Margolin, spokesman for the U.S. attorney in the Southern District of New York, declined to comment on why the FBI investigation ended without any charges.
Flynn, the Erie County district attorney who has said he was "unable from a criminal standpoint to determine who benefited" from the campaign purchases, said he plans to keep an open mind when he meets with Maziarz's attorney later this month.
"We are going to sit down and talk to him and review the new material and based upon the new material, we may come to a different conclusion in the future," the DA said.
Flynn ended up with the case last year after Niagara County District Attorney Caroline A. Wojtaszek requested the case be transferred from her jurisdiction because of a conflict of interest. Henry Wojtaszek, her husband, had testified before a federal grand jury reviewing the campaign expenditures and the grand jury empaneled by Schneiderman.
Maziarz's lawyers had originally asked former Niagara County District Attorney Michael J. Violante to conduct an investigation into the alleged thefts. In October 2015, The Buffalo News reported that Violante was probing former Maziarz staffers and had issued subpoenas. Violante resigned in 2016 amid sexual harassment allegations. Caroline Wojtaszek was elected DA later that year.
Board of Elections' findings
The state Board of Elections, in a separate review of Maziarz's campaign account in 2015, found several irregularities, from how checks were issued to lax record keeping.
The board's probe cited:
• 329 checks worth a total of $137,290 made payable to "cash" that were cashed by Maziarz's chief of staff, Colatarci-Reimann; other staff members; and Jacobs, the campaign treasurer. These same individuals also had 227 checks for a total of $84,210 made out in their names that were also cashed.
• Nearly 250 checks that were reported as paid to individuals, but 176 of those checks were cashed by a different person other than the reported payee.
• Campaign finance statements that revealed large numbers of unitemized transactions and unspecified reimbursements.
• Bank records reflecting numerous cash expenditures, but campaign finance statements that either falsely reported the transactions or failed to report them entirely.
The Board of Elections also raised concerns over approximately $62,000 in payments to Colatarci-Reimann that were not disclosed in campaign finance statements.
"The true purpose of these payments is unknown, but it does appear not to be a purpose related to public office. As such, these payments also appear to be for personal purposes and thus constitute larcenies," the report stated.
Board of Elections Associate Counsel Carla V. DiMarco and Investigative Auditor Laura Cotazino issued a report on the findings and forwarded it to the board's chief enforcement counsel, Risa S. Sugarman, in December 2015. The report concluded with a recommendation to refer the findings to the attorney general "for further investigation and prosecution as appropriate."
Nugent, the attorney representing Colatarci-Reimann, said the board's report was incomplete because it failed to review "underlying records" and witnesses.
He also offered another reason: "We believe the board reached this conclusion as a favor to Maziarz to distract investigators from his own now-admitted criminality."
Where did the money go?
Maziarz says he isn't giving up. He recently released to The News hundreds of pages of FBI interviews, the state Board of Elections' findings, and the Freed Maxick audit, which examined campaign spending from 2007 through early 2014.
The audit cited $413,539 in cashed campaign checks for "questionable" purchases, including:
• $97,162 worth of groceries, gift cards, electronics and coffee shop beverages. The audit did not specify who made most of the purchases, but it identified chief of staff Colatarci-Reimann and campaign treasurer Jacobs as making some of them.
• $46,726 in gasoline purchased by Colatarci-Reimann and Jacobs that often involved multiple charges at different gas stations during "any given week."
• $13,220 donated to school activities and sports teams associated with Jacobs' children, and $5,430 given for the same purposes to activities and teams associated with Colatarci-Reimann's children.
Nugent said that Maziarz's campaign donated to sports teams that Colatarci-Reimann's children were on because the sponsorships generated publicity for Maziarz.
Maziarz said his estimate that $350,000 was stolen from his campaign was conservative. He said he based it on the most questionable of campaign expenditures identified by auditors.
Maziarz staff denies thefts
But his former chief of staff and ex-treasurer offered a different explanation for the whereabouts of the funds: The campaign's purchase of thousands of gift baskets.
In interviews with the FBI, both Colatarci-Reimann and Jacobs cited large amounts of campaign spending on gift baskets donated to charitable, volunteer and community organizations for fundraising raffles.
Colatarci-Reimann estimated 150 to 200 baskets costing as much as $200 apiece were donated annually. That adds up to as much as $40,000 a year.
Jacobs said it was more like 300 baskets annually, each costing about $100. Those estimates put the cost at $30,000 a year.
In contrast, Maziarz says he only approved two or three gift baskets a month. His former workers' estimates, he said, represent a cover to hide the theft of hundreds of thousands of dollars.
"Under penalty of perjury, Ms. Reimann gave an estimate to the FBI of 150-200 per year. The facts likely could support an even higher number,"said Nugent, Colatarci-Reimann's attorney.
Nugent added Maziarz "approved every single campaign expenditure and had a duty to verify the accuracy of all filings."
Maziarz said he did not approve each campaign expenditure and that his staff filed his campaign reports with the Board of Elections.
Nugent said the Freed Maxick audit was "another failed attempt by Maziarz to impugn the character of his former employees."
The lawyer for Colatarci-Reimann said Maziarz's staff used Shutterfly – the online photo processing site – to make photo books for the campaign to give to Western New York Heroes vets and to create Christmas cards for Maziarz's family. "None of these expenses were for Alisa or any other staff member as far as she is aware," Nugent said.
Jacobs, the volunteer campaign treasurer, fully cooperated with federal and state authorities, according to her Buffalo attorneys Nicholas A. Romano and Terrence M. Connors.
“For nearly two decades, Laureen M. Jacobs served as a volunteer treasurer for Sen. Maziarz. When law enforcement first investigated Sen. Maziarz in 2014, Ms. Jacobs was an open book," Romano said. "She fully cooperated and met with federal law enforcement and then state law enforcement officials. Both agencies accepted Ms. Jacobs’s bookkeeping practices and explanations. Today, she remains an open book. Ms. Jacobs places her trust in the criminal justice system, which has already secured a criminal conviction in this matter.”
Romano said he and Connors would not make any other comment.
In 2014 when she was assembling campaign documents for a federal subpoena, Jacobs discovered she had charged $613 in airline tickets to the campaign in a mistake, according to FBI documents. She subsequently reimbursed the campaign.
Jacobs made money
Jacobs, in her September 2014 FBI interview, recalled Colatarci-Reimann telling her how "running around buying the items needed to fill gift baskets was driving her crazy."
Jacobs said she informed Colatarci-Reimann that she was a sales representative for Southern Living at Home merchandise and could place merchandise orders for her.
In explaining the arrangement, Jacobs said she personally paid for orders and later wrote a check to herself from the campaign to reimburse the expense. She also made commissions of 20 percent.
"Jacobs never told Reimann that she was receiving a commission from SLH for items she [Jacobs] sold to the campaign, but surmised Reimann would have known," the FBI stated. "Maziarz knew the campaign was making purchases from SLH for gift baskets, but Jacobs does not know if Maziarz was aware that she was a salesperson for them."
Nugent said Colatarci-Reimann told the FBI she was aware Jacobs had some role with Southern Living and that the campaign made gift baskets with Southern Living products. He said Maziarz knew the gift baskets contained those products.
Maziarz said he had no knowledge merchandise was being bought from Southern Living at Home.
Bank account deposits
In Colatarci-Reimann's June 2014 interview, the FBI showed her campaign checks deposited into personal accounts she maintained at HSBC Bank and later at M&T Bank. The amount deposited into HSBC between February 2010 and June 2012 was more than $10,000.
It was nearly double that for the M&T account, $19,000, between May 2012 and April 2014.
"Reimann correlated the activity in her HSBC and M&T bank accounts, which began in 2010, with an increased demand for baskets placed upon the Maziarz senate office," the FBI stated.
Nugent said any funds received by his client represented either a reimbursement for a campaign or office expenditure or a deposit that allowed her to replenish the petty cash supply.
"All deposits were disclosed to the FBI," Nugent said.
When Colatarci-Reimann was shown several checks she wrote to the campaign account in 2014, ranging from $145 to $190, she said she had reimbursed the campaign for office items that she had kept and four gift cards she also kept for personal use.
How could Maziarz not know?
Several times in interviews with The News, Maziarz was asked how the campaign spending irregularities occurred without his knowledge.
He said he relied on his staff "to do the right thing."
Maziarz, who left office at the end of 2014, said Jacobs, as campaign treasurer, signed the checks and submitted his campaign finance reports. Maziarz said he did neither of those.
Of claims by attorneys for his ex-staff that Maziarz is trying to clear his name at their expense, he says that is a ruse to distract from the campaign funds in question.
"That wasn't my money. It was money people gave in furtherance of their political views and beliefs," Maziarz said.