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May 8, 2014 4:40 PMPublication: The Southampton Press

Court Orders Former East Hampton Town Justice To Return $1 Million In Misappropriated Funds

May 13, 2014 3:53 PM

Former East Hampton Town Justice Catherine Cahill has been ordered by a State Supreme Court justice to pay back $1,045,400 of what the court says are misappropriated funds transferred into a shared account she had with her late husband while she was a sitting town justice.

According to court records, in 2005, Ms. Cahill’s husband, attorney Marvin Hyman, transferred approximately $1.9 million from an account he held with a business partner, Nelson Gerard, as Buckskill Farm LLC, a real estate holding company, to a personal bank account he shared with his wife.

“We respectfully disagree with the judge’s decision. At this point, we do intend to appeal,” said Ms. Cahill’s attorney Stephen Angel of Riverhead, who refused to speak further about the case. “It was a deal that was done by her deceased husband. She inherited the problem. She intends to appeal.”

Mr. Hyman entered into the business partnership with Mr. Gerard in 2003, the court records show, in an operating agreement for the subdivision of a vacant 9.6-acre parcel with an agricultural reserve in the Town of East Hampton. The partners considered selling a portion of the land to the town for around $2 million; as part of the negotiated deal, Mr. Hyman was to be awarded a portion of the proceeds or one of the remaining lots and would then give up his interest in Buckskill Farm LLC.

However, according to Mr. Gerard’s attorney, Jeffrey Stark of Uniondale, Mr. Hyman went ahead with the sale on his own after submitting to the town a new subdivision map with a “substantially expanded reserve area.” According to court records, in September 2005, Mr. Hyman closed on a deal with the town for 6.8 acres of the property at a price of $1.9 million without Mr. Gerard’s knowledge.

Mr. Hyman initially deposited the proceeds from the land sale into the Buckskill Farm LLC account and then transferred almost the entire amount, $1,895,400, to his personal bank account that he shared with his wife, Justice Cahill, according to court records.

“He did the sale by himself, unbeknownst to his partner, and wrote himself a check for $1.9 million unbeknownst to his partner,” Mr. Stark said of Mr. Hyman. Mr. Stark added that Mr. Hyman and Mr. Gerard had an ultimate agreement that if the sale were to go through, Mr. Hyman could keep $850,000 from the sale, or one of the remaining lots. Based on that agreement, the judge in the decision, Justice Paul Bailey Jr., allowed Mr. Hyman’s estate to retain that same amount.

Mr. Stark said that Ms. Cahill will be required to pay interest on the $1,045,400 as well. “The interest is 9 percent a year since 2005. It’s a very large number,” he said. Interest in this case would bring the total to approximately $2.25 million.

According to the April 21 judgment by the State Supreme Court, Mr. Hyman had been terminally ill at the time of the money transfer. Mr. Stark said that Mr. Hyman deposited the money into his personal account when he knew that he was dying.

“Hyman, as the lawyer for the LLC, deposited the proceeds of the sale into the LLC bank account, and then wrote a check to himself for all but a few pennies of that money,” Mr. Stark said. “He was stealing the money, in my opinion. He knew he was dying, and he thought that would be a good thing to do for his family.”

Court documents state the Mr. Hyman believed that he was entitled to all of the proceeds from the sale of the land to the town because it was solely the reserve area that was being sold and that he had an operating agreement with Mr. Gerard that would allow Buckskill to retain the remaining four lots. Mr. Gerard denied that there was ever any such agreement.

The Supreme Court’s decision states that Mr. Hyman had “deliberately and stealthily carried out his plan to spirit away the proceeds of the sale out from under the nose of his partner.”

Mr. Hyman died on December 15, 2005, at which time. Ms. Cahill became the executrix of his will and substituted in legal action against him. According to court documents, in October 2007, Ms. Cahill refused to answer pertinent questions in a deposition with regard to the money transfer, including whether or not she had ever discussed the sale of the property or the $850,000 or one lot agreement with her husband, citing spousal privilege. She later testified in court that her husband “indicated to me that he did not agree to anything.”

The plaintiffs in the case argued that the spousal privilege does not attach to “ordinary conversation relating to matters of business which there is no reason to suppose [the spouse] would have been unwilling to hold in the presence of any person.”

The April 21 decision goes on to state: “Indeed, the Court finds Cahill’s testimony as a whole to be not credible,” and that her answers to questions were “vague and disingenuous.” In addition, the record states that “… the Court finds that Cahill’s professed ignorance on matters fully within the comprehension of any lawyer or judge is not credible.”

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Ouch!
By Frank Wheeler (1823), Northampton on May 8, 14 6:17 PM
Ouch is right but sounds like it was the right judgement.
By dnice (2346), Hampton Bays on May 8, 14 7:25 PM
Put her in jail. If this was a 20 year old junkie robbing 20 bucks from a gas station he would get 10 years!
By chief1 (2784), southampton on May 8, 14 9:15 PM
2 members liked this comment
Can't put her in jail for something her husband did.
By dnice (2346), Hampton Bays on May 8, 14 9:19 PM
1 member liked this comment
You can always rely on chief to be spot on with his analyses. ;-)

However, he is correct about our two-tiered system of justice and the miserably failed "Drug War".
By Mr. Z (11670), North Sea on May 8, 14 11:41 PM
Would you guys please leave Chief alone? Confusing him with facts, serves no legitimate purpose.
FWIW, that 20 year old junkie, if it were to be his first offense would likely receive 6 and 5. i.e. 6 months in jail and 5 years supervised probation.
Whilst he may be leaning in the right direction in his criticism of the justice system, he would also be first in line to dictate that no taxpayer funds be used to rehab that 20 year old junkie.
By But I'm a blank! (1283), Hampton Bays on May 9, 14 11:19 AM
She knew what her husband did she was a big part of it!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
By Biba (564), East Hampton on May 9, 14 4:29 PM
She knew ALL about EVERYTHING her husband did !!!!!!!!!!
By Biba (564), East Hampton on May 9, 14 6:03 PM
You're missing the point ..... A judge ......lied....& STOLE money WHILE STILL A JUDGE !!!!! GET IT?!?!?!?!?!?!?
By Biba (564), East Hampton on May 11, 14 9:14 AM
Karma
By bonac79 (18), East Hampton on May 9, 14 10:18 AM
1 member liked this comment
Didn't the money go into SHARED ACCOUNT? "They" did that ... not "him". Wouldn't it be nice if every taxpayer who paid into the CPF prior to that got a little of that "Town-misappropriated" money back? Keep watching the hows and whys and whos of the purchase of that property .... nothing less than political "insider-trading". No wonder she didn't run again. What a sham.
By Board Watcher (534), East Hampton on May 9, 14 11:57 AM
It should read "Former Democrat East Hampton Town Justice Catherine Cahill..."
By Preliator Lives (431), Obamavillie on May 9, 14 12:04 PM
Now now - there are greedy, lying, power-hungry individuals on both sides of the fence ... it just so happens that it was an all-Dem Board and Committee that chose to support her and her hubby's "acquisition", and her for office. I'm sure it was no coincidence that a whole planning process was held up and a few little rules changed so he could make that particular money grab "for his family". The Court's decision is particularly scathing of Ms. Cahill. Oh well - I would surmise she doesn't have ...more
By Board Watcher (534), East Hampton on May 9, 14 12:12 PM
Your comment is confusing ..... Please explain
By Biba (564), East Hampton on May 12, 14 6:58 AM
The Cahill-Hyman sham was that they and their Dem friends on the Town Board (and Planning Board) used CPF money to "buy" an area that couldn't be built on anyway. And passed a resolution authorizing set back clearing to be relaxed "at the Planning Board's discretion", AND just happened to institute the "upzoning" of properties that would have made the whole project IMPOSSIBLE like, 2 seconds after the money was in "their" bank account. Nice ..... for them! Not only did she "inherit" the "problem" ...more
By Board Watcher (534), East Hampton on May 12, 14 5:48 PM
It was a joint account and she has the obligation to know what's in her account and how it got there. She should be disbarred because she lied to the court and that is a reason for disbarment not to mention contempt of court.
By chief1 (2784), southampton on May 9, 14 11:53 PM
1 member liked this comment
This woman was always aware of the "business" deals her husband made .... IT WAS A JOINT BANK ACCOUNT. That says it all !!!!!!!!!!!!!!!! She should be disbarred AND sent to jail ......
By Biba (564), East Hampton on May 11, 14 9:12 AM
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