Huntington Pols Founded an "Un-Safe" Bank - Then the Town Backed It...
By Maureen Daly and Niall Fitzgerald
A group of Huntington politicians - Councilman Sal Ferro; Water Commissioner Paul Tonna and Planning Board member Joseph Tantillo founded a small private bank - Empire National Bank - which was charged by the federal government with "unsound and unsafe banking practices" - but then they got the Town's taxpayers to backstop the Bank, as an "official depository" of the town - and made a mint doing it.
A series of transactions shot through with conflicts of interest, concealed private transactions, and self-dealing.
In 2008, Paul Tonna founded Empire National Bank, based out of Islandia. The bank's primary source of income was to be interest on loans for commercial and apartment buildings. It had only two branches.
Ferro worked with Tonna to launch the bank and was “instrumental in developing startup funds,” according to the Bank's prospectus. Ferro was named a bank Director and Board Member.
Joseph Tantillo of Melville, whom Ferro would later appoint to the Town of Huntington Planning Board, was also named a bank Director.
A few years later, the US Comptroller of Currency (OCC) imposed a “supervisory agreement" on the bank, after finding that the bank engaged in “unsafe and unsound banking practices.”
Empire Bank was then required to create a multi-year, long term, “strategic plan” to clean-up its business and reduce its bad loans.
The plan to turn around the bank began to fail, with stockholders equity falling 2% from 2015 to 2016, according to financial reports.
The plan for a rescue ? Getting the Town of Huntington to name Empire National Bank as "official depository" for the Town.
Huntington has a $200 million annual budget, and a payroll of 900 employees. Big funds and big fees for a small risky bank making private commercial and local apartment building loans.
In an unusual April 2016 emergency resolution, the Town Board voted to add Empire National Bank as a Town depository. Unusual, because bank depositories for the Town are added in the beginning of the year, as part of the yearly housekeeping resolutions.
Then-Councilman Marc Cuthbertson (D-Northport) had proposed the depository change to Empire, but was then “absent” from the vote.
The following January 2017, and then again in January 2018, Cuthbertson made the motion and voted for additional resolutions to designate Empire as Town depository.
Supervisor Ed Smyth - who was a Councilman at the time - also voted for it.
Cuthbertson did not disclose to the Board that he was a paid attorney for land fraudster Gregory DeRosa, Paul Tonna’s lobbying client, and that the Bank had an interest in DeRosa's properties.
Cuthbertson was also Ferro's paid attorney - something he also failed to disclose to the Town Board. All a blatant conflict of interest.
Cuthbertson, DeRosa, and Ferro are all members of Tonna’s "Energeia" land developer's syndicate.
A Cuthbertson family member was thereafter hired by Tonna, at his private lobbying firm, Praxis Public Relations, to “assist” with “business-to-government clients.”
After Empire National Bank was authorized by Cuthbertson as a Town depository, the shareholder's equity in the bank quickly rose 12% by 2018.
Interestingly, the bank depository “scheme” also coincided with Frank DeRosa being hired as the bank's Vice President and Commercial Loan Officer.
Empire joined the ribbon-cutting ceremony in 2017 of Greg DeRosa's Gateway Plaza, and the total loans processed by Empire National Bank then - coincidentially - rose 30%, from a previous yearly average of 6%.
With the pump-up from the mixing of Empire National Bank and the Town of Huntington, Tonna, Ferro, and Tantillo voted to sell the Bank to Flushing Bank in 2019 for $111.6 million. The deal was finalized in 2020.
In January 2023, Ferro filed the resolution before the Town Board to appoint his business partner Joseph Tantillo - a former Director at Empire - to the Town of Huntington Planning Board. A clear conflict of interest.
Supervisor Ed Smyth co-sponsored the appointment, and was the deciding vote.
The Tantillo appointment passed by one vote - 3 to 2 - with Ferro, Smyth and former Councilwoman Joan Cergol (D-Halestie) voting "Yes;" but Council members Dr Dave Bennardo (R-Greenlawn) and Gene Cook (R-Dix Hills) both voting "No."