Evidence against promoter Crogan seems mighty slim to seasoned hands

Accused Rick Crogan

He said, she said?

From the looks of it, that's exactly what the felony case against promoter Rick Crogan may boil down to.

Over the weekend, the Niagara Falls Reporter obtained copies of the indictment against Crogan, along with supporting depositions from two women, Becky Marchetti, 49, and Christine Salamone, 30, who were involved with Crogan in the staging of the Main Street Music & Art Festival, an event first organized by Crogan when he was president of the Main Street Business Association.

Their depositions constitute what appears to be much of the case that resulted in Crogan being arrested on grand larceny charges two weeks ago, with this year's festival scheduled for this weekend.

This much is known: In 2012, Marchetti, the manager of tellers for Encompass Niagara Credit Union, opened up the bank accounts for Balibans LLC, Crogan's for-profit company, to handle the festival's finances. Along with Crogan, she was one of the signatories on the account.

Marchetti is also president of Niagara Rises, a local organization that sponsors events to promote the area and employment opportunities here. Niagara Rises has strong ties with Mayor Paul Dyster.

According to Marchetti, she only opened the account in the name of Crogan's private, for-profit company because Crogan told her they needed a bank account to tide them over until the festival could be registered as a 501c not-for-profit. It was her understanding that the festival would be a charitable event, staffed and run by volunteers.

Accuser Becky Marchetti

Time passed and that never happened, Marchetti swore in her deposition. Two accounts were opened, a savings account in the name of Crogan and his business partner and spouse, Michael Murphy, and a checking account in the name of the Niagara Falls Music & Art Festival, which both Crogan and Marchetti were signatories to.

As a bank employee, Marchetti certainly knew the difference between a 501c not-for-profit and an LLC for-profit company. At the time the accounts were opened and for a long time afterward, she was silent about any concerns she might have had, as she continued to be a signatory on the bank account, opened at a bank she worked in.

The very successful festival in 2013 kept everyone happy until one day a check bounced. Crogan covered the check, but later told Marchetti and others associated with the festival that, as president of the event, he had decided against taking it to not-for-profit status and wanted it to remain as a private business.

A group of volunteers selected to serve as a board of directors to oversee the not-for-profit that was never created was essentially disbanded.

In any event, the bank accounts were in Crogan's name, with the Main Street Music & Art Festival being nothing more than a DBA for Balibans LLC, the private company Crogan owned. In other words, any money taken out was withdrawn from the private business accounts of companies belonging to Crogan.

The evidence so far seen shows nothing in writing that suggests Marchetti did not know the business was operating as a for-profit company.

As for Crogan's promise to take the festival to 501c status, this seems to be a civil matter. There does not seem to be any law that forbids a businessman from withdrawing money from the accounts of a for-profit business he owns and depositing it in his own account.

Still, Marchetti's deposition is considered more damning than that of Salamone, who works as "creative director" for Renewal by Andersen Window Replacement and lives in Rochester.

According to Salamone, Crogan told her that he was interested in Andersen being the main sponsor for the festival and asked for $15,000. She says she told him the company wouldn't spend that much money on one event, but, according to her, Crogan said he ran between 40 and 50 different events throughout the year leading up to the festival.

Salamone said she told him that Andersen would want vendor space at all of these festivals and if he could provide them that, the company would pay the $15,000 and be the main sponsor.

The problem with Salamone's testimony is that there is no paperwork whatsoever to document it.

"At that point we shook hands and it was just a verbal agreement," she said in her deposition. Still, she authorized Crogan to charge her company $15,000 on Andersen's American Express card.

"Since then, I have told Rick that I no longer want to be a part of this festival," Salamone said. "We paid him the full $15,000 up front, with no signed contract, and we were not getting the amount of events that he (verbally) promised."

Presumably, her higher ups at the window company were not amused. Who would pay $15,000 to a promoter to stage shows without a written contract?

Niagara Falls Police Capt. William Thompson said the charges were brought against Crogan as part of an investigation by the Niagara Falls Police Department and the Niagara County Sherriff's Office. The investigation was prompted by a tip from someone inside the festival organization, Thompson said.

The Reporter later learned that the tip originated with Marchetti.

Niagara Falls police and Niagara County Sheriff's investigators interviewed a number of Crogan's sponsors, and Niagara County Undersheriff Michael Filicetti said that the investigation is ongoing.

"He was taking money from the festival and funneling it through his account," Filicetti said. "The most recent allegation is that he took some money from (Andersen) and the money fell right into his personal bank account.

"(Prosecutors) are still in the process of building a case… It has been a long process. This most recent part came out and we (decided) we were just going to arrest him…. They are still trying to connect the dots on the finances. We can always add charges after the fact."

As of press time, it is unclear why an owner of a private LLC, which by law allows profits and losses to pass directly through to an owner, would be prohibited from passing income from his LLC to himself, whether from a sponsorship or other source of income.

It is also unclear how a private owner of a company can be convicted for accepting money for a sponsorship, without a written contract that would prove or disprove fraud being claimed by the sponsor.

Andersen's name and logo appeared on stages and in promotional material that was released in connection with events Crogan promoted.

The case may hinge on some violation of public trust concept, suggesting that, while there is no written evidence that Crogan misrepresented his company, people who worked with him assumed it was a not-for-profit, or would become a not-for-profit.

That Marchetti and others volunteered time in a belief that Crogan, who clearly operated the festival as a for-profit venture, would later turn it over to them as directors of a not-for-profit company that they may have one day been able to take salaries is unfortunate.

They may have a civil case if not a criminal case against Crogan.

As far as we can tell, no one claims to have made a single payment as a "donation," nor did Crogan ever give anyone a receipt that indicated that money paid to his company was tax deductible as a donation, as would be the case for a not-for-profit.

Sponsors, such as Andersen, clearly knew that they made a business investment and receipts and checks indicate the money was paid to a private company, exactly like companies pay for sponsorships for for-profit concerts or sporting events anywhere else.

Unless more evidence comes out, more than what appears to be contained in the confused and contradictory statements of two ladies who claim to have been deceived, as they, themselves, voluntarily operated in a business world of non-written contracts (one of them a banker, the other in charge of promotions) this prosecution may indeed be a case of pulling the trigger early, a case of ready, fire, aim.