Sunday, July 28, 2013

Partner: Co-owner of Westchester County Airport (KHPN) businesses had no right to $860,000

The controversial owner of several businesses at Westchester County Airport is being accused of siphoning more than $860,000 from a chain of Connecticut gas stations, just two days after a judge stripped him of control of the companies and put his estranged business partner in charge.

Sammy Eljamal, 38, of Purchase could face a contempt charge for violating the Westchester County judge’s order, the latest development in a series of legal battles over control of gas stations in New York and Connecticut between Eljamal and two investors, Leon Silverman of Purchase and James Weil of Scarsdale.

“It’s our intention to demonstrate to the court that he has in fact taken money from the businesses to cover his own personal expenses,” said attorney Marc Oxman, who represents Silverman. “I believe that there are a number of agencies that are monitoring Mr. Eljamal’s activities, that they will be well aware of this.”

In an email exchange with The Journal News, Eljamal called the claims “a plot to steal a company that I brought to us for acquisition ... (Silverman) wouldn’t have had access to such deals (without) me or my experience.”

His lawyer, Bruno Gioffre, conceded that his client used the money from the Connecticut companies earlier this month to pay off delinquent personal federal income taxes.

“He took money from the company to pay off some of his taxes, which people do all the time,” Gioffre said.

But he noted that Eljamal owns 95 percent of those businesses.

“This has been, from the outset, their attempt to squeeze him out of these companies for their own personal benefit, to limit his ownership,” Gioffre said. “The faster they squeeze him out and push him out, it limits his ownership because his ownership in some of these companies increases the longer he’s in.”

The disputes stem from two partnerships Eljamal formed in 2009: an agreement with Silverman to take over a Connecticut chain of stations and a separate deal with Silverman and Weil to purchase 88 Shell stations in Westchester, New York City and on Long Island.

Eljamal, an Ardsley native, took over his first gas station at 18 and has built a vast business empire across the region; he and his family run scores of gas stations, convenience stores and car washes.

Last year, one of his companies, Airport Mart, beat out four competitors for the county contract to take over the 5,000-square-foot restaurant and bar space at Westchester County airport. The company also operates the airport’s newsstand, Dunkin’ Donuts and the departure lounge concession stand.

A Journal News investigation last month revealed that Eljamal and his father, Musa, who is listed in documents as vice president of Airport Mart, have a history of legal and business troubles. In 2002, they were indicted on felony fraud charges related to the state’s worker compensation fund. Sammy Eljamal was not convicted. Musa Eljamal pleaded guilty, but avoided a prison sentence after the pair apparently repaid the fund.

Difficulties with Sammy Eljamal’s partnerships with Silverman and Weil began to fall apart within two years. In 2011, Silverman sued Eljamal to gain control of the Connecticut stations, while Eljamal sued Silverman and Weil, claiming the investors reneged on their promise to let him manage the New York stations. Last year, Eljamal also sued Weil for slander and libel.

Eljamal claimed his two partners broke the agreement by pushing to remove him as manager of the New York stations, although he said he was the one who brought them in on the deal in the first place. Eljamal also noted that he was the sole guarantor of a $33 million bank loan used to purchase those businesses.

In the Connecticut lawsuit, Silverman claimed that Eljamal violated the agreements by improperly using company funds, including to pay himself more than $340,000 in unauthorized salary in 2009 and 2010, buy about $40,000 worth of New York Yankees tickets and to pay off his father’s $10,700 American Express credit card bill.

Eljamal’s share of the revenue from the New York stations became the subject of another 2012 case, with the money placed in escrow until a series of liens and claims on the funds is decided, including claims by federal and state tax authorities. That case will move to federal court next month at the request of the U.S. Attorney’s Office, an option the office has when federal matters like unpaid income taxes are involved.

Gioffre, Eljamal’s attorney, maintained that all of the funds that Eljamal withdrew from the Connecticut partnership “were business related” and that “anything that was spent was for the good of the company.”

He said Eljamal built up the companies using his knowledge of the fuel business, and at one point invested $1.5 million of his own money to keep several of the stations afloat. He said Eljamal’s tax woes — in which he defaulted on hundreds of thousands of dollars in state and federal income taxes — were the result of payments Silverman and Weil claimed they made to Eljamal but never did, Gioffre said.

“These guys, Silverman and Weil, my understanding is they were the money guys that came in on this deal,” Gioffre said. “Sammy’s the operator. Sammy’s the one that built up the business. Sammy’s the one that networks with other companies trying to raise money and things like that for the businesses. So any expenditures were pursuant to those endeavors, for him to build up these companies and build up these businesses and build up these relationships. I think that they were all authorized.”

But in court papers, Silverman said Eljamal failed to invest a contracted $2.7 million in the Connecticut enterprise and instead transferred $863,308 from a company bank account to his New York company to pay off his delinquent income taxes. The transfers came on July 11, two days after Westchester County Judge Joan Lefkowitz named Silverman manager of the Connecticut stations.

Silverman’s lawyers have asked Lefkowitz to hold Eljamal in contempt of court, claiming that the transfers were in direct violation of the judge’s order naming Silverman manager of the Connecticut businesses.

“The judge entered an order on July 9 making Leon the manager of the company,” said Lois Rosen, an attorney representing Silverman. “At that moment Mr. Eljamal no longer had the authority to do anything with respect to the bank account, to take 10 cents let alone eight hundred and sixty-some-odd thousand dollars. That action was beyond any authority that he had given the court’s order.”

Eljamal’s attorneys are due to submit a written reply to Lefkowitz next week. Gioffre said there were no grounds for his client to be held in contempt.

“There was nothing explicit in the judge’s order as to who can make such distributions and how,” he said. Secondly, he said, “in order to be in contempt for violating an order, you have to have been served or at least know the specific contents of the order. There’s a difference between knowing that an order has come down and knowing the contents of the order. And that’s what they need to establish. They have not been able to establish that.”

In his emails to The Journal News, Eljamal said he was “not too thrilled about the gasoline business any more. I am working with more alternative fuel companies today than ever before,” he said, adding that “I’m very busy currently as I am working on the acquisition of a MLB baseball team.” He did not say which one.