Crime & Safety

Montauk Fire Chief: Department Didn't Lose a Nickel

Scholarship fund money invested with the men accused in $100 million Ponzi scheme, but pulled out when suspicions raised.

The Montauk Fire Department pulled their funds out of an investment, made with the Long Island men charged in a $100 million Ponzi scheme on Thursday, in the nick of time, Chief Richard Schoen said.

Although the fire department invested money from its scholarship fund with alleged fraudsters Brian R. Callahan, a 43-year-old investment fund manager, and his brother-in-law Adam J. Manson, with whom he owned the Panoramic View Resort & Residences in Montauk, the department never actually lost any money, the chief said.

The US Attorney's office, which obtained a 24-count indictment in federal court against the pair, said only that a Long Island-based fire department were one of the investors. Robert Nardoza, a spokesman for the office, would neither confirm nor deny the claim that it was the Montauk Fire Department.

The fire chief said the department could have lost money had they not pressed for answers early on.

In 2006 or 2007, on a recommendation from one of its members, the department decided to invest money from its scholarship fund with a fund, managed by a man who also owned a Montauk business.

Only a few months after the department made the investment — closer to $400,000 than the $600,000 that The New York Times reported, according to the chief — questions were raised as to exactly where the money was. The fund manager could offer no real answers.

"They said they were in various stocks — in and out. The department decided that's not something we wanted to do with our scholarship money," Schoen said.

"Within a month, we got our money back," he said. "We lost not a nickel on a deal."

"If we lost $600,000 there would be a loud outcry in this town," Schoen said.

The department voted to put the money in CDs.

The scholarship funds are not raised through tax dollars. The department raises the funds through its annual Big Bucks fundraiser and other events.

Four $8,000 scholarships are given away each year, the chief said.

Schoen and other officials at the fire department were not surprised when news broke of Callahan and Manson's arrest. "The FBI had interviewed us — last fall, early this spring — about what we did, when we did it," he said. "I've been waiting for something to come of this."

The chief said he and his first assistant chief uttered the same phrase when they heard of the arrests and the amount of money people lost: "Aren't we glad we did what we did?"


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here

To request removal of your name from an arrest report, submit these required items to arrestreports@patch.com.