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Two Huntington Pols Enmeshed with $50M Melville Land Fraudster

By Maureen Daly and Niall Fitzgerald

 



Two Huntington elected officials - Huntington Town Councilman Sal Ferro and South Huntington Water Commissioner Paul Tonna - who have spearheaded the attempted mass apartment re-zone of Melville - are both enmeshed as business partners of a Melville land developer accused in Court of perpetrating a massive $50 million-plus land fraud on local investors and contractors.

 

Multiple lawsuits accuse Gregory DeRosa and his wife Nicolle Girolamo DeRosa of Laurel Hollow, and their Huntington based land development group G2D Development, of stealing funds, setting-up fraudulent shell companies, funneling money to their private purchases, and running a $50 million "Ponzi land scheme."

 

One of DeRosa's victims, John Paci III, of Huntington, a former Huntington School Board member and NY Jets quarterback, was defrauded out of $4.6 million by DeRosa and his group, according to Court papers.

 


DeRosa purchased four commercial office properties in Melville - over 200,000 square feet of office space in Melville.  The properties are the subject of pending Huntington Town resolutions - introduced by Sal Ferro and backed by Paul Tonna - to re-zone DeRosa's Melville properties into high-density apartment buildings - potentially enriching DeRosa by over $100 million dollars in increased property values.

 

Ferro and Tonna have used their official positions to support the re-zone of DeRosa's properties - over which the Town and the Water Authority have control - without disclosing their huge personal financial relationships with DeRosa.

 

According to multiple witnesses, both Ferro and Tonna have met repeatedly with DeRosa over the past three years to plan and craft the re-zone of Melville into high-density apartments. DeRosa attended nearly all of the public "listening sessions" held by Ferro and Supervisor Ed Smyth, on the Melville re-zone.

 

"Everytime I went to Greg DeRosa's office, Sal Ferro was sitting right there," stated one local businessman.

 

"DeRosa and Sal Ferro are very close friends," stated a defrauded creditor.

 

DeRosa met regularly in Huntington with both Tonna and Ferro - and other Town officials and politicians, according to multiple witnesses.

 

Nassau land records show that just over one year ago, in August, 2023, Ferro issued a personal $1 million "mortgage loan" to DeRosa.  

 


However an examination of the property records indicate something strange:  The Ferro Mortgage was placed on DeRosa's home at 31 Woodfield Court in Laurel Hollow - but the property appears to have zero equity - it was already "underwater" with a $2.84 million first mortgage from Morgan Stanley. 

 

According to real estate sites and local realtors, the market value of the Laurel Hollow property is between $1.6 million and $2.1 million.  The property was a one-story ranch, which was reconstructed in 2018 into a two-story "mid-century modern" house. It sits on 2.1 acres, and has no pool. The neighboring houses - many much nicer and with pools - are valued in the $1.5 million to $2.1 million range.  

 

That means that the DeRosa property was already over $800,000 "underwater" last year, when Ferro gave $1 million to DeRosa, and filed his $1 million second Mortgage. 

 

There was no "collateral" - no equity in the property - to secure Ferro's mortgage.

 

DeRosa and his wife Nicolle purchased another home, on Tiffany Road in Oyster Bay Cove, and put their Laurel Hollow house on the market in 2023.  But the asking price - $4.9 million - was double the market value.

 

DeRosa recently "reduced" the listing price to $4.4 million.  For a $2 million house. With $3.84 million in mortgages. Clearly he does not want to "sell," except in a way he controls.

 

Equally strangely, DeRosa informed several of his defrauded creditors, earlier this month, that he had a buyer for the Laurel Hollow property.  He claimed he was selling it for about $4 million, and asked the defrauded creditors to lift their litigation liens.

 

The creditors refused, suspecting that the "sale" was a ruse to offload the property to a straw purchaser, obtain new financing, and get $1 million paid back to his friend Ferro, before his "ponzi scheme" collapsed.  DeRosa even scheduled a mock "property closing" where Ferro was to be paid off - and then canceled the closing.

   

Those facts make Ferro's $1 million payment to DeRosa an unsecured personal or business loan or investment.  The question is of course: An investment into what?

 

Ferro was elected to the Huntington Town Board on November 2, 2021.

 

Just days after Ferro's November 2021 election, DeRosa purchased a commercial office building at 560 Broadhollow Road in Melville.

 

The Melville high density apartments re-zone is opposed by the area civic associations and the Half Hollow Hills School Board - one of the area's top school districts.

 

The School Board has charged that the building of 3,000 apartments as envisaged by Ferro, would impose a $20 million tax increase on residents to pay for the extra staff and school buildings needed.

 

Paul Tonna is employed by DeRosa as a paid lobbyist. He has his offices in DeRosa's building at 71 New Street in Huntington. The sole lobbying client of Tonna's public relations firm, Praxis Public Relations, is DeRosa and G2D, according to Lobbying Disclosure documents filed in Nassau County by Tonna.  

 

Tonna's filed contract states that DeRosa pays Tonna a base salary of $5,000 per month, or $60,000 per year, plus additional undisclosed sums, to represent DeRosa's firm before local government authorities.

 

Tonna is a former Suffolk County Legislator, and is the elected Commissioner of the South Huntington Water District, which has jurisdiction over the Melville Overlay Zone.

 

Tonna is also the paid Executive Director for the Suffolk County Village Officials Association.  He also runs a secretive private "invitation-only" land developer's club called "Energia." 

 

Construction and developer executives are invited to join Energia for a fee; public officials including town board members and planning board members pay no fee.

 

Energia runs what one member described as a "cult-like program" of multi-day initiation and training events to inculcate members and public officials with the dogma of mass housing construction. 

 

Tonna is the founder of Energia.  Ferro has been an Energia member since 2018. DeRosa has been an Energia member since 2009.

 

DeRosa's reach into Huntington goes beyond Ferro and Tonna:  DeRosa was the beneficiary of the "Gateway Giveaway," where the Town of Huntington "essentially gifted a multi-million-dollar piece of commercial real estate to a private developer" to construct the 65-unit "Gateway Plaza" apartment complex at 1000 New York Avenue.

 

Also alarming is the suspicious land transfer to DeRosa of 133 Spring Road, Huntington, for a high-density condominium development built by DeRosa.

 

DeRosa received a lucrative re-zoning of 133 Spring Road, and Paul Tonna, as Water Commissioner, lobbied the Suffolk County Water Authority to sell the land to DeRosa. 

 

DeRosa has now shuttered his offices and laid-off his employees.  In addition to filing suit, defrauded creditors have contacted law enforcement.  According to those defrauded creditors, Paul Tonna is allegedly now "lobbying" the District Attorney to not file charges against DeRosa.

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