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Troodler, 42, admitted to committing securities fraud as a result of a scheme to defraud investors in municipal bonds issued by the RLDC and the town, said U.S. Attorney for the Southern District Preet Bharara.
"This guilty plea, in what we believe to be the first municipal bond-related criminal securities fraud prosecution, is a big step in policing and bringing accountability to the $3.7 trillion municipal bond market," Bharara said.
St. Lawrence has pleaded not guilty in the case which is still pending against him.
The indictment and superseding information charged that St. Lawrence and Troodler lied to investors in the town’s and RLDC’s bonds in order to conceal the deteriorating state of the town’s finances and the inability of the RLDC to make scheduled payments of principal and interest to holders of its bonds from its own money.
The town’s financial downfall was caused by the $58 million total cost of the stadium. The town paid more than half of that cost, despite the rejection of the town’s guarantee of bonds to pay for construction of the stadium in a town-wide referendum in 2010 and St. Lawrence’s public statements that no public money would be used to pay for the stadium, the indictment said.
The trail of fraud included a fake $3.6 million receivable on the general fund's books at the time the RLDC issued the initial $25 million to build the stadium and another of $3.08 million initially earmarked for the purchase of a piece of property called The Hamlets from the town by the RLDC, but never took place, the indictment said.
Troodler, who currently lives in Pennsylvania, and St. Lawrence were arrested on April 14, 2016, are free on $500,000 bail.
The former town attorney pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of conspiracy, which carries a maximum sentence of five years in prison.
Troodler is scheduled to be sentenced on Sept. 18.
The charges against St. Lawrence contained in the Indictment are merely accusations, and he is presumed innocent unless and until proven guilty, Bharara said.
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