By Kathianne Boniello
Hevesi on Tuesday urged the city Parks Department not to renew its lease with Douglaston Manor, which operates as a city concessionaire.
In a statement, a Manhattan spokesman for Douglaston Manor refuted the charges and said the restaurant had “fully satisfied” all the city's requirements.
The Douglaston Manor restaurant – also known as the Crabhouse of Douglaston, Inc. – uses city-owned land in exchange for fees, taxes and a certain portion of their revenue, said Nick Paolucci, a spokesman for Hevesi. The restaurant's contract with the city expired Oct. 31.
During an April 2000 surprise audit, the comptroller's office found Douglaston Manor failed to report about $95,000 worth of income to the city, Hevesi said. By extrapolating figures from their April findings, auditors estimated the under-reported amount for the year to be $526,000, the comptroller said.
The comptroller's report said Douglaston Manor had not reported about $25,000 in food and beverage sales, coat-check fees and admission charges at its dance events during the April audits, for a total unreported income of about $304,000 during the year.
Hevesi also accused the restaurant of failing to report several banquets to the city worth about $35,000. Unreported income for banquets at Douglaston Manor was estimated by the city to be about $222,000 for the year, he said.
Douglaston Manor, which is run by Robert Santucci, has been at the intersection of Commonwealth Boulevard and Marathon Parkway since 1980. It shares space with the Douglaston Golf Course.
Joe Carella, the restaurant's spokesman, said in a statement, “The operator of Crabhouse of Douglaston believes the facility has been run in a proper and orderly fashion, and that it is unfortunate that the comptroller's office has issued its report.”
Hevesi's office said the catering hall failed to report all food and beverage sales, misled auditors about events held there and concealed cash receipts from the business' banquets, dance events, and coat-check charges.
Paolucci said the comptroller's office has urged the city Parks Department, which oversees the site, not to renew its contract with Douglaston Manor and to seek a new concessionaire for the land.
“I understand the Department of Parks and Recreation's concern about providing uninterrupted service at the Douglaston facility, but the city should not continue to do business with organizations that engage in the kind of activities described in this report,” Hevesi said.
But Douglaston Manor said, “There is to this day no evidence that it intentionally concealed any of its revenue from city agencies.”
The restaurant said it “fully responded” to accusations by the comptroller's office several months ago and provided “detailed information.”
The report sprang from a random audit conducted by Hevesi's office in April. After an audit in 1996, Paolucci said, Douglaston Manor was found to have owed about $100,000 in unpaid taxes, fees, and utility bills. Paolucci said a large portion of the 1996 debt has been paid.
During the April audit “it was quiet obvious money wasn't being reported to the city,” Paolucci said.
During one part at Douglaston Manor, Paolucci said, auditors witnessed a bartender removing cash receipts and journal tape from a cash register. The cash register, he said, was not connected to a computer system that would have tracked the receipts and the revenue was never reported.
On several occasions, Hevesi's office said, the operators of Douglaston Manor told city auditors that events such as banquets or dances were either postponed or canceled.
Auditors confirmed that the events had taken place after interviewing customers who had attended the supposedly canceled parties.
“The disappearing cash and canceled parties are just two examples of the substantial evidence my auditors found indicating that Douglaston Manor was hiding revenue from the city. The city should immediately recoup the fees it is entitled to,” Hevesi said.
The audit was conducted by auditors from both the city Department of Finance and the comptroller's office. Hevesi said he forwarded a copy of the audit to the city Department of Investigation as well as the Internal Revenue Service.
