SALE OF SOUTHAMPTON HOUSE REDUCES JAIL TIME

By Dan Rattiner

Terri Gaines' house in Southampton is being sold this week. It's not getting sold for the amount she put it up for, which is a pretty common story these days. What is not a common story is that the amount she's selling it for is directly related to the time she spends in jail. The lower the amount she gets, the more time she spends. The higher amount she gets, the less time.

It must have been a pretty harrowing time for Gaines during this past year, as the market price for real estate sank lower and lower. Finally, though, it is coming to an end. It's not particularly good news. But it's over.

Gaines, over a period of six years between 1999 and 2005 was the bookkeeper for the Montauk Fire Department. During that time, unbeknownst to anybody, she managed to siphon off $539,000 for her own personal use. She spent about $110,000 for personal items for herself and private school for her kids. She spent $66,000 for nobody knows what because the checks were made out to her directly. And she spent $330,000 on vacations at gambling casinos and vacation resorts. She's well traveled, but on the fire department's money.

When the loss was finally discovered, people were amazed that she had done that. She is a well-known local girl, born and raised here. People think, or thought, highly of her. But she did it. And she's very sorry about it.

Judge Ralph Gazzillo, who handled the case, was, of course, not so pleased. In a plea bargain, it was decided that she should serve three to nine years in state prison. On the other hand, if she made restitution of the full amount, he would reduce her sentencing to one to five years. But Gaines didn't have the money.

What Gaines did have, however, was a house that, with some of the money, she had built for herself in Montauk up in Culloden Shores. She'd put that up for sale. Surely the proceeds of the sale of that house would provide the funds for the restitution. The property was appraised. She was right about that. The house would probably sell for about $550,000, considering what the market was at that time.

As time passed and as real estate values sank, there were a few lowball offers for the house, and then not even that. Prices were coming down, and unless that situation was reversed, Gaines' jail time would be going up.

You think you've got troubles? In the plea bargain, there really was no provision for what might happen if Gaines were able to make only partial restitution. But lawyers familiar with the case say that it really doesn't have to be all or nothing. If it's three to nine for no money and one to five for full restitution, then surely paying half would land her somewhere in between. And other amounts might be considered for smaller or larger stays in the slammer.

There's a lot of sympathy for Gaines in Montauk at this time. People say that with the house lingering on the market for more than a year, they should put the matter behind them and let her get on with her life. But judges don't see things that way. She had done what she did. Judge Gazzillo made her an offer. It was not his fault the market tanked.

The plea bargain arrangement was made in late December of 2007. The judge wanted her back in his court in January with the money. Certainly, at that time, it seemed that could be done. People were lining up for water-view houses at that time.

To his credit, the judge gave her extensions to the date when he would award her sentencing. The first was to March 2008, then to May 18, 2008, then to September. There was a "final" extension to January 9, 2009, and then, as it appeared that finally this house was now in contract, to February 6.

As this is written, it is January 16. The Montauk house never did sell, but a house on Sandford Place, in Southampton, willed to her by her mother, was sold last week for a sum, which, on the surface, would seem to solve the problem. It went for $850,000. There are, however, back taxes owed and perhaps some mortgage payments, so it is possible that in the end, the net paid out in restitution might be below $539,000. If it were one percent below, she would have to serve one year plus 18 days extra.

We will know on February 6, when Gaines is back before Judge Gazzillo in Islip for sentencing.

Keep in mind that you can always get one quarter of your sentence off for good behavior, so the actual jail time would decrease, by that mathematical equation, from 12 months and 18 days to 9 months and 12 days.

It's been a unique and harrowing experience for her and her family. Hopefully, beginning February 6, they will know where things stand and begin to get back to their lives.

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