Tag Archives: mortgage

Mychajliw’s Ambition & Fraas’ Foreclosure

29 Oct

It’s a shame when politicians go negative – especially ones who have cultivated an image for being always bright, shiny, and positive. 

Comptroller Stefan Mychajliw is on the air with negative ads hitting challenger Kevin Gaughan for a personal income tax issue that he had. One’s personal ability to pay a tax bill, which could very well have been brought about simply through bad guessing and not having enough cash to cover an unexpectedly large tax bill, doesn’t necessarily reflect on one’s ability to conduct audits and ensure that government personnel and processes are running as smoothly and efficiently as possible. 

Gaughan’s and the Democrats’ response has been even more pitiful, attempting to hit Mychajliw for being fired from two TV stations for rule-breaking, and for still being listed as a principal at a private PR firm while on the people’s dime. These are all little side issues. It’s become so petty that we now have failed county Democratic chair and current Cheektowaga Democratic Chair Frank Max’s patronage hires throwing Gaughan under the bus because he didn’t pay for her Coke at a downsizing meeting. (Max’s people are backing Mychajliw for a variety of reasons, not the least of which is “to embarrass Jeremy Zellner”.) 

One thing Gaughan has pointedly promised is to not seek higher office while Comptroller. Voters like to see people fulfill their elected roles. Mychajliw, who holds no legal or financial background or degree, and who has no experience whatsoever with accounting or auditing, is uniquely unqualified to be Comptroller. But don’t come between him and a microphone, because he’s building a brand. 

The website he was planning called “Rightlean.com” never went anywhere, and he used “eriecountyworks.com” for his transition website. But this one hasn’t yet been used: 

So, “stefanforcongress.com” has been aiming high even since March 2012. This would have set Mychajliw up for a possible run against Louise Slaughter or Brian Higgins. Slaughter has since been redistricted out of the Buffalo metro. 

But more to the point, we have someone running for taxpayer watchdog whose only personal tax nut is the sales tax; public documents reveal that Mychajliw hasn’t owned any property in Erie County since his 2007 divorce. The 70 Griswold address he gives to register his websites and to reimburse himself from campaign funds belonged until September 18th to his sister, Charlene Morales. Sources say Mychajliw now lives with his father. 

But Mychajliw was acutely mindful of the fact that he was unqualified for the job. The last two Republicans to challenge Mark Poloncarz for the comptroller job hit him for being a lawyer, and not a CPA. So, naturally, the next time the Republicans win the seat, they pick a guy with a broadcast journalism degree. So, Mychajliw pledged to surround himself with the “best and brightest“, the shiniest of whom was Teresa Fraas, a CPA who had only ever worked in the private sector.

Fraas, as it turns out, had let her CPA license lapse in New York. Mychajliw made headlines by urgently media-alerting a supposed scandal of DSS records being available out in the open to anyone, but as it turns out, Fraas had tricked a custodian to let her into a locked room where the records were kept. Surveillance video proved it. 

Mychajliw ran ads pledging that the first “audit” he would conduct would look into the “friends and family” hiring practices in county government. That’s fantastic, but it wasn’t an “audit”, and is completely outside of the job description of a Comptroller. Hiring “friends and family” through patronage or nepotism may be something we don’t like because it is, or seems, unfair, but it doesn’t affect county finances unless you’re creating a new job for the person. Presumably, the underlying position and its related costs would already be accounted-for in the budget, and the decision on hiring is not reviewable or subject somehow to audit. 

Auditing is about money – not politics. 

Pledging to audit hiring practices is silly, and he has no power to “end” anything. He doesn’t have legislative powers, or even executive power with respect to changing that. And if a “friend” or “family” is qualified for the job, what objective harm is being done to the county coffers? 

Real CPAs will tell you Mychajliw’s office hasn’t conducted a proper audit pursuant to generally accepted auditing rules as of this date. 

Back to Teresa Fraas.

We are told that Kevin Gaughan is not qualified to be Comptroller because he fell behind on his taxes. We also know that his opponent, Stefan Mychajliw, is making much of this, and that he had pledged to surround himself with the “best and brightest” to protect the taxpayer. Teresa Fraas, who recently resigned, was at the forefront of that effort, trumpeted as the first CPA to be Deputy Comptroller in charge of Audits since 2006. 

But Ms. Fraas got caught falling behind on the mortgage for a home she owned in Arizona. 

On December 10, 2012, this public notice appeared in the Case Grande Dispatch. Fraas’ Arizona home at 42950 W. Martie Lynn in Maricopa, AZ was to be sold at foreclosure auction for her failure to pay her mortgage and/or property taxes. The auction sale deed reveals that Fraas’ default exceeded $175,000. 

This dwarfs Gaughan’s tax issues in both scope and severity. In fact, Gaughan’s failure is only 16% of Fraas’, since we’re doing math. 

Fraas Trustee’s Deed upon Sale

Whom has Mychajliw retained to replace Fraas, and who are the financial and accounting professionals minding the store for the unqualified incumbent?