Police Charge Newspaper Ad Rep with Scheme

A Springs man working as an advertising salesman with The Sag Harbor Express has been charged with a defrauding scheme that totaled over $17,000 and involved about 20 local businesses. 

arrested Richard H. Klein, who is 67, on five felony charges on Sunday. According to Detective Jeff Proctor, Klein confessed when presented with mounting evidence that he used clients' credit cards to pay for other ads that he had given away without the newspaper publisher's knowledge, all while collecting a commission. He is being held at the Suffolk County jail in Riverside, pending an indictment. 

The investigation was launched after Bryan Boyhan, the publisher of The Express, had reported a forged check in the amount of $9,250 on Jan. 13, Proctor said.

Detective Paul Fabiano initiated the investigation and, according to Proctor, started by calling , the company that the check had been made out to.

Proctor said the owner at the store told police that he had discovered more than $9,000 in charges from The Express, when the store had really only taken out $2,000 to $3,000 in ads. In December, the owner "called Richard Klein and said 'We've been doing business with The Sag Harbor Express for years and we've never had a $9 to $10,000 bill before.'" 

Klein reportedly blamed the bill on a bookkeeping error, and told the owner that the bookkeeper had been fired, which Proctor said was not true. "No one's at The Express, he goes into Bryan's desk, signs the check in his name and hand delivers it" to English Country Antiques. 

Last week when Boyhan and his bookkeeper discovered the forged check, their bank called English Country Antique's bank to reveal it was a forgery. According to Proctor, the antiques store owner in turn calls Klein, who promised to wire over the money from his personal account.

Detectives had Boyhan pull the year's receipts and after combing through them, Proctor said, it was discovered that Klein had been charging ads to at least three businesses, including English Country Antiques, and giving other  businesses free ones. According to Proctor, and the Clamshell Foundation in East Hampton were also being charged fraudulently. 

Some of the businesses thought they were receiving ads in exchange for "a barter deal," Proctor said. Some restaurants, like Cappelletti and Espresso for instance, allowed Klein to dine with friends and alleged clients in exchange for an ad in the newspaper. Other businesses were told if they bought one ad, they'd get a second one free.

Proctor said Boyhan had not approved and was not aware of these reported deals. Klein was reporting the ads as sales, charging other businesses for them, and even making a commission from The Express. 

Boyhan did not immediately return a call for comment, but in an article in The Sag Harbor Express on Thursday, he said, “The Express has had a great relationship with the businesses in this community and that’s very important to me and everyone else at The Express."

Rossetti Perchik, one of the directors of the Clamshell Foundation, said on Thursday that the exact amount that was charged fraudulently to the foundation's credit card is between $1,500 and $2,500. "It completely slipped through my fingers and apparently it slipped through everybody's fingers." 

The foundation, which is behind the annual Sand Castle Contest in Amagansett and the former Boys & Girls Harbor Fireworks in Three Mile Harbor, is supported by donations for the most part, Perchik said. What money is left is used for grants.

"What is really sad is that the less money we have the less we are able to give away," he said, adding that donations to the East Hampton Trustees for shellfish seedlings and to the Coast Guard Auxillary for boating safety courses did not receive funds this past year. 

However, Perchik said that he is not angry at The Express. "I don't have any bad feelings about it at all. I appreciate them calling to let me know." 

Klein has been charged with two counts of third-degree grand larceny, and one count of second-degree forgery, falsifying business records, and scheme to defraud. He was also charged with unlawful possession of person information identification, a misdemeanor.  He was arraigned in Sag Harbor Village Justice Court on Sunday. 

Proctor said that the case will be handled by the Suffolk County District Attorney's Major Crimes office, division of economic crimes. An indictment is expected as soon as Friday.