A man charged with stealing more than $431,000 from the city of West Haven through fraudulent invoices also received more than $85,000 for picking up leaf bags for the city last August and September.
John Trasacco, a Branford resident, was paid $85,400 for “leaf/debris removal and dumping” from Aug. 3 through mid-September through a company called KAT Environmental Services, newly released financial documents show.
The payments issued to KAT Environmental were not mentioned in the federal indictment against Trasacco, which was unsealed on Feb. 18.
But the transactions were authorized in the same manner as the money that went to the two other businesses Trasacco founded and controlled, The L&H Company and JIL Sanitation:
KAT Environmental was formed in July of last year, just before it contracted with West Haven’s public works department, and the pair of invoices the company submitted were approved by Michael DiMassa, who previously served as a state Democratic lawmaker and an assistant to the West Haven City Council.
DiMassa is at the center of an ongoing criminal investigation, which has revealed serious financial and oversight problems within the city. DiMassa was arrested in October and charged with fraud.
Several city officials said they had never heard of KAT Environmental, and Mayor Nancy Rossi said the contracts the company received were never put out to bid to allow other businesses to compete for the work.
Meanwhile, members of the state board overseeing West Haven’s finances are now questioning whether the state needs to take a more aggressive approach to managing the municipality’s money.
Federal prosecutors accused DiMassa last month of conspiring with several people, including Trasacco, to submit fraudulent invoices to West Haven’s finance department in order to cash in on federal pandemic relief funds and other taxpayer money.
Trasacco and DiMassa did not respond to phone calls and emails for this story. Neither did their defense attorneys.
Thomas McCarthy, West Haven’s public works director, did not respond to several questions from the Connecticut Mirror. But Rossi said she spoke to McCarthy about KAT Environmental and its business with the city last year.
The city’s staff, Rossi said, did not solicit offers from other companies before paying KAT Environmental, even though West Haven’s laws require a public bidding process for any contract over $10,000.
The public works department, Rossi added, only used KAT Environmental to pick up the yard waste “for a short amount of time.” And she said the city ended that business relationship because the company had “awful workers.”
The invoices submitted by the company didn’t specify how many homes it was to pick up yard waste from or in which parts of the city it was working. Instead, the company billed West Haven a flat rate of $2,000 per day.
Rossi said those services were needed in the city in last summer mostly to allow people to dispose of their grass clippings.
But two of West Haven’s City Council members said they were unfamiliar with KAT Environmental and the work it was paid to perform for the city.
Peter Massaro, the new Democratic chairman of the City Council, said he was not aware of Trasacco or any of his companies prior to his arrest last month.
“That’s all I can comment about this,” Massaro said. “It is still under investigation. I never heard about this company.”
Bridgette Hoskie, the chairwoman of West Haven’s finance committee, confirmed that the city pays outside companies to pick up yard waste throughout the city, but she didn’t know the specifics of those contracts or which companies perform that work.
“I know that we do contract out leaf bag pickups, but whether or not the services were provided, that doesn’t come before the city council,” she said.
‘Fictious vendors’
Members of the state Municipal Accountability Review Board, which has overseen West Haven’s finances, have struggled to get a handle on the city’s purchasing system for more than four years.
MARB members repeatedly warned West Haven’s leaders during monthly meetings that the city didn’t have the necessary controls in place to catch fraudulent invoices or unscrupulous contractors who might be seeking to take advantage.
Annual audits of West Haven’s finances also highlighted the risk that presented to the city and its taxpayers.
“At present, the city allows purchases without first approving vendors,” West Haven’s auditors wrote in December 2020. “This increases the risk of fictitious vendors as well as not being able to obtain the best price or quality. In addition, unintentional conflict of interest issues may arise.”
All of those problems burst into public view last fall when DiMassa and another city employee, John Bernardo, were arrested by the FBI for allegedly funneling more than $463,000 in federal relief money to a shell company they set up.
The fallout from the federal criminal investigation has continued to grow since then. Last month, Trasacco and DiMassa’s wife, Lauren Knox, were added to the list of defendants who are accused of cheating West Haven out of hundreds of thousands of dollars.
Meanwhile, MARB members have stepped up the pressure on West Haven’s elected leaders to force them to adopt better purchasing rules and to fix the city’s finance department, which continues to be understaffed.
Several members of the review board have noted that it is not just local tax dollars that are at risk from West Haven’s continued mismanagement.
The state, they pointed out, has given West Haven more than $16 million in restructuring funds since 2018 to stabilize the city’s finances and to help the city’s staff make the necessary changes to its financial systems.
That state assistance could soon come to an end, however, if West Haven doesn’t make significant improvements.
Increasing state oversight?
State officials warned West Haven last fall that it would not receive any additional money from MARB until the city could prove that it had fixed its purchasing policies and its other financial controls.
Stephen Falcigno, one of the 10 current members of MARB, told his colleagues this month that he believed the state needed to play a more direct role in managing the day-to-day operations of West Haven by installing more state employees in West Haven’s city hall.
Only then, he argued, could MARB properly protect state taxpayers, who continue to provide money to help West Haven and its residents.
“I think at some point we are going to have to increase our level of participation,” Falcigno said. “I think we need to look at more stringent ways of helping West Haven achieve some of the goals they are trying to accomplish.”
Several other members of MARB agreed that West Haven was clearly not moving fast enough to fix its finances and basic accounting policies.
Christine Shaw, who represents the Connecticut Treasurer’s Office in MARB meetings, noted that West Haven’s leaders continue to claim that they are working on the same issues “month after month.”
“I think the reason MARB exists and why this type of oversight is in place is so the city can get its fiscal house in order,” Shaw said.
For now, members of MARB are in a holding pattern. They are waiting on a forensic audit that is examining how West Haven used the more than $1.1 million in federal CARES Act funding it received last year.
That audit is expected to be finished by the end of this month.