Councilman Fagen Indicted for Stealing $14K in Unemployment Benefits

A grand jury indicted Long Beach City Councilman Michael Fagen for stealing more than $14,000 in unemployment compensation by concealing his employment as an elected city official from the state labor department, Nassau County District Attorney Kathleen Rice announced Wednesday. But Fagen's attorney maintains his client's innocence and called the case a "political witch hunt."

In a grand jury indictment handed up Tuesday, Fagen, 55, was charged with third-degree grand larceny, 38 counts of first-degree offering a false instrument for filing, and one count of petit larceny. If convicted, Fagen faces up to seven years in prison.

According to Rice, Fagen started receiving $405 per week in unemployment insurance benefits from the New York State Department of Labor (DOL) on Sept. 24, 2009, before he was elected that November to a four-year term on the City Council and, on his inauguration in January 2010, he began to receive a yearly salary of $19,828.

Rice said Fagen failed to disclose to the DOL both his government employment and his employment as a salesman for a hotel membership benefits company; he continued to receive undeserved unemployment benefits totaling more than $14,000; and, after his inauguration, he falsely certified that he was unemployed to the DOL every week.

“The voters of Long Beach trusted Michael Fagen to represent their interests and uphold their community’s values,” Rice said in a statement. “Mr. Fagen violated that trust with every unemployment check he cashed and every dollar he stole from the taxpayers of this state.”

Fagen was originally arrested and charged with on June 7, 2011. The following day, at a City Council meeting, he proclaimed his innocence. “In the end, I’m confident that the evidence will exonerate me,” he said. “I’m an innocent man.”

Rice’s office and the DOL’s Office of Special Investigations jointly investigated this case after they were notified last year by former City Manager Charles Theofan.

Fagen’s attorney, Marc Gann of Mineola, was unavailable for comment Wednesday, but he told others the case is a "political witch hunt," claiming the prior Republican administration set up Fagen by filing false documents on his behalf, stating that he worked full time when Fagen reported he worked as little as six hours per week. Gann said when Fagen questioned the city when 80 hours appeared on a biweekly payroll stub, he was assured it was "just a bookkeeping measure,” according to Newsday.

Moreover, Gann told the Long Beach Herald the prior administration submitted the claims to the D.A. “in an attempt to have [Fagen] arrested" and to “keep him from opening his mouth about things he knew” were going on in Long Beach, including information regarding the city’s troubled finances.

Assistant District Attorney Megan Gallagher of the Government & Consumer Frauds Bureau is prosecuting the case under the supervision of Bureau Chief Marshall Trager.

* This story was updated on 2.9.12.