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Rockland Cracks the Code
Posted February 28th, 2013

Sweeping fraud and abuse uncovered in state’s STAR rebate program; DA announces amnesty opportunity

Rockland DA Thomas Zugibe is leading the effort to crack down on abuse of STAR rebate program

Rockland County District Attorney Thomas Zugibe announced on Wednesday that authorities in Rockland had discovered rampant abuse of the STAR tax rebate for homeowners. He is offering offending homeowners an “amnesty” opportunity through April 1: if they pay restitution for moneys owed to the state, they will be pardoned of any potential criminal charges. Any owners who fail to make restitution by April 1 will be subject to potential felony larceny charges.

The STAR rebate is only meant to apply to primary residences. Zugibe said that while authorities were investigating to find out if homes were being kept up to fire code, they realized that many homes were being improperly claimed as primary residences, sometimes by owners who did not even live in the United States.

The effort is one which sees county officials helping fill the state coffers, since the STAR rebate is paid by the state. The effort will cost county money to administer, so Zugibe said he’s hopeful that in turn the state will pay some of the costs. The attorney general may wish to follow on the enterprising work of Rockland, as Zugibe sees the potential for tens or hundreds of millions of dollars to be recouped by Albany through aggressive prosecution of STAR abuse.

During the past 11 months, detectives in the Special Investigations Unit have already uncovered more than $679,000 in improperly or fraudulently claimed STAR exemptions from 2012 representing a grand total from Rockland’s five towns.

District Attorney Zugibe said, “STAR is only available on your primary residence, but our investigation has identified dozens of individuals who own two homes and get the exemption on both. Our figures represent the tip of the iceberg. Those who double-dip STAR exemptions are cheating the system, at a time when the state’s finite resources are of critical importance.”

STAR is New York’s version of a homestead exemption or a property tax discount for an owner-occupied primary residence. The state provides homeowners with two levels of partial exemptions from school property taxes.

Basic STAR is available for owner-occupied primary residences where the homeowners’ and their spouses’ income is $500,000 or less. Under the basic exemption, $30,000 is taken off the assessed value of the primary residence for the purposes of school taxes, which in many locations is the largest component of the property tax burden.

Enhanced STAR provides an increased benefit for the primary residences of senior citizens (age 65 and older) with qualifying incomes. The Enhanced option exempts the first $63,300 of the full value of a home from school taxes as of 2013-14 school tax bills. This exemption is increased annually according to a cost-

of-living adjustment. To be eligible for Enhanced STAR, the combined income of all owners and their spouses must be $79,050 or less.

The program costs about $2.66 billion annually.

As part of the STAR exemption crackdown, subpoenas were given to local assessors’ offices for STAR locations that were believed to be non-owner occupied. Additionally, the District Attorney’s Office received addresses that were the subject of building code and fire code complaints. As a result, 516 locations were preliminarily identified as being in violation of STAR qualifications with many more locations to be investigated.

A software program utilized by the Town of Ramapo’s assessor offers the ability to cross-reference exemption locations with other municipal databases. With the help of this technology, more than 75 homeowners were identified during this process as living out of state or overseas, while illegally receiving the STAR exemption. A confirmation process is currently underway to positively corroborate these suspicions.

In the Town of Ramapo alone, the STAR program costs taxpayers about $26 million annually.

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