Kodak May Face Litigation for Land Devaluation Scheme

An upstate New York town is preparing to sue Kodak in the wake of an assessment bribery and kickback scheme that resulted in deflated property values for Kodak’s facilities in the town. The town of Greece, New York, says that the value of Kodak’s property in the town was illegally manipulated, resulting in a diminished tax bill for the Rochester-based camera and imaging giant and a loss of nearly $4 million in tax revenue for the town. The town’s former assessor, as well as two former Kodak employees, are facing federal charges as a result of the scheme.

Federal prosecutors say that the scheme hinged upon the town’s former assessor, Charles A. Schwab, lowering assessments in return for kickbacks from one of Kodak’s regional appraisers, John E. Nicolo. Nicolo held several contracts with Kodak that based his payment on the size of the company’s tax bill. According to charging papers, Nicolo was also paid inflated fees by Kodak tax executive Mark S. Camarata in return for kickbacks on some of the fees.
Kodak has filed a civil racketeering lawsuit against Schwab, Nicolo and Camarata, along with 21 other parties. Kodak, however, contends that they too are a victim of the assessment fixing scheme because Greece, NY has overvalued Kodak’s holdings, and also because current property values are higher than the average market value. The company has filed a lawsuit against the town in return, alleging that Schwab maintained assessments of Kodak property at artificially high levels, defrauding $14 million in inflated taxes from the company over the last 13 years.
Kodak is the town of Greece’s largest corporate taxpayer and over one third of the town’s residents either work for the company or are retired from it. Kodak and the town of Greece have had a contentious relationship over the last several years and have butted heads over tax assessments repeatedly in the past. The town and Kodak are currently planning reappraisals of Kodak’s property in an effort to determine a more accurate value of the company’s holdings.
Source; DigitalCameraInfo

Posted: Fri - August 12, 2005 at 03:20 PM