Business

The Batavia Business Improvement District held its annual meeting and awards luncheon today at the Homestead Events Center in Batavia City Centre.

Top photo, Rick Mancuso, co-owner (with his brother Ben) of T.F. Brown's accepts proclamations from Sen. Mike Ranzenofer and Assemblyman Steve Hawley. Also pictured, Don Burkel, executive director of the BID, and BID President Victor Gautieri.

Bottom photo, William Parker, winner of "Spirit of Downtown Community Volunteer Award," Mary Valle, "Spirit of Downtown BID Volunteer Award," and Rick Mancuso, "Spirit of Downtown Business Award."

Not able to attend, Ken Mistler, owner of Next Level Fitness & The Daily Grind, winner of "Spirit of Downtown Business Award" for a newly established business.

Alexandra Reigle, 11, and her 8-year-old brother Devyn, spent the day at Pauly's Pizza on Ellicott Street learning more about what their father does for a living. Kevin Reigle, in the back at the far right, has been a manager at Pauly's for five years. He brought his children into the shop today for "Take Your Kids to Work Day." 

They started when the doors opened in the morning and stayed until nearly 5 p.m. doing many of the same tasks their dad does.

Above, they help get pizza dough ready for rolling with the help of Jake Laverick.

Kevin said the day was really eye opening for them. He said they gained a real appreciation for what it is that Dad does for a living.

Kathy Pettinella says in November 2008, she almost lost her business -- a business started and built by her late husband and late son 15 years ago.

Her business, Dave's Produce, relies on cash in the bank so she can buy product at farmers' markets and deliver it to local restaurants.

So when one local restaurant allegedly stiffed her for nearly $70,000, it really hurt.

"Oh, my God -- I am done. I’m absolutely done." Pettinella said were her first thoughts when she learned of the original Pontillo's Pizzeria closing. "Looking at all that money, I went through all my bank statements, my deposit slips, I was in trouble. I couldn’t cut back anything anymore out of my household budget."

How and why Pontillo's was allegedly able to run up all that debt is something Kathy still can't fully explain, but until last week, when The Batavian wrote about the debt in a story on  financial issues surrounding the Pontillo family and their legendary pizza business, she said nobody in Batavia knew about the debt. It was something she wanted to keep secret.

She said she was shaking the first time she answered a call from The Batavian asking about the debt.

"I was petrified," Pettinella said of her long-standing fear of people finding out about the debt. "I was was afraid people would think, ‘What a stupid woman. That’s why women don’t run businesses because they would drive it into the ground.'"

"That was my initial thought -- that I just made a bad example for the rest of women who are working so hard to run their own small businesses."

Kathy Richardson and Dave Pettinella -- Big Dave, as she calls him -- were together for 27 years. They would eventually have two children together, but never marry. She said Dave was a strong, capable businessman who was good with numbers and taking care of his customers.  He founded Dave's Produce when he happened to come across a local restaurant that needed deliveries from farmers' markets in Rochester and Buffalo. 

It didn't take long for the business to grow and bring in more clients.

Who hasn't seen the big "Dave's Produce" truck driving around town?

Big Dave died in in July 2007, though, just two years after Dave and Kathy's son, Dave, Jr., died in a car wreck at Daws Corner. 

A week after Big Dave died, it was Kathy taking the orders, writing the bills, buying the produce and delivering the product in that big white truck.

She's run Dave's Produce as a one-woman business ever since.

So when Pontillo's managers started calling on her to deliver more than just lettuce and eggplant in March 2008, she couldn't help but think that taking on more responsibility for such a big local business would be a feather in her cap.

She had heard Pontillo's had lost some of its suppliers over unpaid bills, she said, and at that point, there was at least an unpaid balance of $10,000 owed to Dave's Produce, but she wanted to believe that eventually Paul and Sam Pontillo would get caught up and pay off what they owed.

"That’s the sad thing about it," Kathy said. "Yeah, by the time summer came around, Pontillo's was way in debt with me, but then the other vendors shut them off. And I felt bad. Why I felt bad, I don’t know. But I did want to see the business run and I was their main supplier."

Starting in March 2008, Dave's Produce was not just making two deliveries a week to Pontillo's in Batavia, but three, and the average monthly order went from $2,000 to $3,000 range to more than $10,000, according to invoices Kathy Pettinella provided to The Batavian for review.

Some of the invoices were paid -- usually for only a few hundred dollars, at most, but all of April 2008 was paid.

Dave's Produce went from delivering fruits and vegetables to within weeks of the first time of being asked to pick up some wings and BBQ sauce to bringing in just about all the product Pontillo's needed, including all the meat and mozzarella.

"I could get them anything they needed," Kathy said.

What she couldn't understand was, Pontillo's was obviously bustling with business, so why wasn't she getting paid?

"It would have been so much less of a headache," Kathy said,  "to shut them off and say, ‘you know, you treated the guys in Buffalo and other areas real bad. Your checks are bouncing for them as much as they are for me. All this money I’m paying for the product, these other vendors are paying for the product, and you’ve got all these customers paying for the product – where’s the money going? Where is the money going?'"

It's the same question John Pontillo said he's put to his brothers, Sam and Paul, but he's never gotten an answer either.

Paul, however, says Kathy Pettinella is lying.

"I don't care what she confirmed, she's lying," Paul Pontillo said when first asked about the debt a week ago. "Ly-ing. Lying. OK? It's nonsense. We spent three hundred bucks a week with her. Produce. How many weeks would she let us go to come up with this number?"

The invoices show that even before Dave's Produce became the main supplier for Pontillo's, the restaurant was putting in orders for $500 to $600 per week.

Paul Pontillo apparently signed one of the invoices, and Sam Pontillo appears to have signed another, but the rest were signed by managers.

It was Paul, though, according to Pettinella, who was responsible for making payment.

According to Pettinella, if she ever got a check it would bounce, and then she would spend three weeks trying to get in touch with Paul, who would then pay off some of the bounced check with cash and issue a new check for the next invoice, but then that check would bounce.

"Pauly would say, ‘you’re going to get $1,000,'" Pettinella said.  "Well, by the time I get the money from the night manager, there’s not $1,000 in that envelope. There’s $500. But you try to call Paul and there’s no way he’s going to pick up the phone."

Shortly after Kathy Pettinella sat down for an interview with The Batavian on Saturday, she stopped in at Wilson Farms on East Main Street, across the road from the recently reopened Pontillo's Pizzeria, and as she was leaving the store, she stopped Paul Pontillo walking on the sidewalk.

She approached Paul -- talking to him for the first time since the original Pontillo's closed -- and asked him about calling her a liar.  She then called me and said Paul wanted to talk some more, but rather than try to arrange a three-way interview over the phone, since I was already in my truck and in the area, I just stopped by to talk with both of them. 

When I arrived, Kathy and Paul were yelling at each other. Paul was heatedly denying the extent of the debt Pettinella said Pontillo's owed Dave's Produce.

Paul Pontillo said there was no way the restaurant ran up that much debt to Dave's Produce, and he also accused Kathy of not being fully cooperative in settling the debt.

"I asked you for copies of the invoices six months before we closed," Pontillo said.

Just an hour before, The Batavian had reviewed invoices provided by Pettinella. The allegedly unpaided invoices spanned from January 2008 to October 2008. Six months prior to the closing would have been May 2008. 

A good portion of the $67,750 in bad debt the invoices allegedly show occurred after May 2008, with the entire April 2008 debt being paid off, according to Kathy.

The Batavian first became aware of this alleged bad debt because of a document provided by John Pontillo. He said it was prepared by Sam Pontillo after the restaurant closed, to show just how much debt the business had wrung up. Of the suppliers with outstanding balances, Dave's Produce was by far the largest.

The document lists the amount owed at $68,421.75. 

Paul Pontillo vehemately disputed that figure, and has continued to dispute it, since first being showed the document. He said that at most, Pontillo's owed Dave's Produce $3,000 or $4,000.

In another interview this week, Paul said the level of debt Pontillo's had at the time it closed would be normal for a business that just shut its doors. He said if the financial figures were available for South Beach, when it closed, or Cristina's, when it burned down, those documents would show a similar amount of unpaid bills.

"That's just what happens when you go out of business," Paul said.

The debt, he said, is really an old issue. He thinks The Batavian should be paying closer attention to the conduct of the estate's administrator, John Forsyth.

While Paul Pontillo is clearly the one Kathy Pettinella blames -- she said John did try to repeatedly warn her -- for the bad debt, she said Sam Pontillo knew what was going on (he did apparently sign one of the invoices), and she also had her own problems with Sam at his Le Roy restaurant.

Pettinella produced a copy of an allegedly bounced check from Sam and said it was shortly after that -- in March 2009 -- that she stopped deliveries to the Le Roy Pontillo's, though the bounced check and other debts associated with the Le Roy store were eventually paid, she said.

She said Paul Pontillo was well aware of her situation and that he and Sam "saw her coming."  They took advantage of her, she said.

"For Pauly Pontillo to turn around and do this to me – I just never would have thought it," Pettinella said. "I just never would have thought, for somebody to be that evil. I wasn’t in the right state of mind. I wasn’t paying attention. I didn’t want to be mean. I didn’t want to hurt anybody. But you can’t be (that way) in a business -- business is business, it’s not personal. I just wasn’t looking out for myself."

Pettinella said no other small business owner in Batavia has even come close to running up any kind of big debt to Dave's Produce, which is part of the reason she said she was so trusting of the Pontillos.

"The people here in Genesee County, in Batavia, they’re wonderful," Kathy said. "They just support local business and they’re so good. We have a strong community. Business owners here in Batavia, their integrity is high. They’re … I’m just at a loss for words – they’re just amazing here.”

When asked again to explain how it happened, how the alleged debt was ran up to $67,750 in just 10 months, Kathy Pettinella tries again to answer and then says, “That still doesn’t answer your question, why did it keep going on so long? I just kept looking for the grace. I just kept thinking, things will turn around. People can’t be that evil. Wrong."

In spring and summer, well-crafted jewlery can really sparkle, so now is a great time to create something special for yourself or a loved one.

A world of dazzling possibilities beckons at Valle Jewelers this week during its semi-annual remounting and custom-design event. It takes place from 9:30 a.m. to 7 p.m. Friday, April 23, and from 9:30 a.m. to 4 p.m. Saturday, April 24.

Enjoy a personal consultation with the store's own custom-design specialist, Mark Berman of Manhattan, who will be there to help you design a special piece or re-craft something you already own. Make something old look new!

Berman will showcase his entire line of Icon Creations, with hundreds of bridal sets to choose from. Free financing is available to qualified buyers.

"He's just incredibly talented -- you tell him what you want and the next thing you know, it's on a piece of paper," Maria Valle said, noting that he uses computer-aided design software to bring ideas to life.

For happy couples who are no longer happy or a couple, Valle has some advice.

"Diamonds left over from love gone wrong are still good diamonds," she said. "You earned them. Reset them and enjoy them."

All fine jewelry needs proper care to ensure its durability and beauty for years to come. With jewelry, it's especially wise to be proactive. This would be a good time to have those gem stones sitting precariously amid your ring's worn-down prongs to be remounted or put into a stylish, new setting.

A lady at my optometrist's office admired my wedding ring one afternoon, which had been on my finger for many years.

"You ought to have a jeweler look at," she suggested.

She was right. I kept thinking "I'll get around to it, but I don't have time now," only to look down one day not long afterward to see a gaping hole where a one-carat diamond used to be.

Walk-in consultations are, as always, welcome, but people wishing to talk with Mark Berman about a design idea, can also make an appointment by calling 343-3372.

A bill that would have instituted new overtime rules, unemployment benefits and allowed farm workers to organize into collective-bargaining units died in the New York Senate's Agriculture Committee today.

On a 6-3 vote, the committee voted down the measure, known by opponents as the "Farm Death Bill."

Opponents said the bill would have increased costs for New York's farmers by $200 million per year.

"It would have killed agriculture in New York State, and that's the state's number one industry," said Sen. Mike Ranzenhofer, who sits on the committee and voted against the bill.

After passage in the Assembly last year, the bill was looking like it would make it to a floor vote in the Senate when Sen. Darrel J. Aubertine, a Democrat who chairs the agriculture committee, lobbied to have the bill reviewed by his committee before letting the full Senate vote on it.

In a statement today, Aubertine said:

"The committee came to its conclusion following a lengthy, open process which included participation from all sides of the issue. The committee worked diligently to cut through the rhetoric, and aggressively pursued the facts of this matter. Toward that end, the committee voted based on the merits of this bill and its impact on farm workers, farmers and consumers; not partisan attacks, half-truths, rhetoric or political polling."

Ranzenhofer said that articles by Batavia Daily News staff writer Tom Rivers, which he collected in a book, helped educate legislative leaders about farm labor and dispel a lot of misinformation being spread by supporters of the bill.

"Tom was  able to bring reality check to what some of the more sensational special interest people were saying," Ranzenhofer said.

Staggering debts -- to the government, bankers and suppliers -- appear to be what led to the closing of Batavia's most legendary pizzeria in November 2008.

At the time the restaurant closed, suppliers were possibly owed in the neighborhood of $220,000, according to a document obtained by The Batavian. In addition to those debts, there were unpaid mortgages exceeding $354,000 and taxes of more than $250,000 due. 

Many of these debts, outside of the mortgage, which was amply paid off in foreclosure proceedings, appear to be unsettled to this day, including more than $10,000 owed to a local funeral home that handled arrangements for Elizabeth "Betty" Pontillo following her death on Aug. 5, 2008.

In total, debts associated either with Pontillo's Pizzeria at 500 E. Main St., Batavia, or with Betty's estate, exceeded $850,000.

Disputes over those debts -- how they occurred, who is responsible, and who allegedly stole what or lied to whom -- has pitted brother against brother in the Pontillo family.

John and Paul have harsh words for Sam, and Sam isn't talking, but in previous news articles, he hasn't necessarily been kind to his siblings.

John, Paul and Sam are the sole surviving children of Salvatore ("Sam" Sr.) and Betty Pontillo (Daniel Pontillo died in 1957 and Elizabeth Mullen died in 2003; her son, John Mullen, is an heir to the estate).

Salvatore founded Pontillo's Pizzeria in Batavia with his brothers in 1947. It inspired scores of other pizzerias, including a chain founded by Salvatore's brother, Anthony, in Rochester that bears the Pontillo's name.  

Last week, Sam, working with business associates from Rochester, opened a Pontillo's Pizzeria at the old Batavia location.

Both John and Paul say they resent how Sam is being seen as some kind of hero in Batavia when he's the one who brought down, according to them, the original Pontillo's, especially when, according to John, Sam cheated a number of local business owners out of tens of thousands of dollars.

Even as Sam enjoys a busy opening week, he faces the possible loss of the Le Roy location. Genesee County records show property taxes on those parcels haven't been paid in nearly three years. According to County Treasurer Scott German, foreclosure procedures could start on July 1 if the debts remain outstanding.

It's also not clear if the new owners of Pontillo's Pizzeria in Batavia can legally operate a restaurant under that name. The federal trademark for "Pontillo's" is owned by the estate of Anthony Pontillo, but both John and Paul contend that rights to the name in Batavia are still owned by the estate of Betty Pontillo. 

Whether Sam is part owner in the new business is also unclear. John said Sam has represented himself as a part owner; Paul is convinced Sam is nothing more than a salaried employee.

Tom Masaschi, a Rochester developer who purchased the Batavia Pontillo's location for $400,000 last December, and is reportedly one of the investors in the new business, has not returned calls to The Batavian.

On Sunday, when told John and Paul had spoken with The Batavian, Sam declined an interview request for the third time.

"It's been a long 15 months," said a broadly smiling Sam as he stood at the walk-in counter of the Batavia Pontillo's, which was packed with customers. "I'm only looking forward now."

The Debt
Kathy Pettinella inherited her business from her late husband, Dave, who died after a lengthy illness in July 2007. Dave Pettinella, the founder of Dave's Produce, grew up on Vernon Avenue, just 10 doors down from the Pontillo boys.

When The Batavian called her to ask about the nearly $70,000 in debt Pontillo's Pizzeria seems to have rung up against Dave's Produce, she was surprised anybody knew about it.

"It's not something I've talked about," said Pettinella, whose son died in an automobile accident on Route 98 at Daws Corner in August 2005. "It's a very sore subject. It nearly put me out of business."

Pettinella is not the only vendor who was apparently left hanging when Pontillo's in Batavia was shut down. A document which John says Sam prepared early in the settlement process for Betty's estate, lists more than 30 vendors who were owed money (the document is not included in the probate file).

Some of the debts are only a few hundred dollars, such as $385 to the Batavia Daily News and $462 to Southern Wine Distributors. A handful of debts, however, reach into the thousands, with the $68,421.75 possibly owed to Dave's Produce being the largest.

Kathy Pettinella did not confirm the precise amount, but it was clear from our conversation that she felt Pontillo's closed owing Dave's Produce a substantial amount of money. After agreeing to a follow-up interview the day after our conversation, Pettinella has not returned calls from The Batavian.

Paul doesn't dispute most of the debts listed on the two-page document, but he does say there is no way Pontillo's Pizzeria owed Dave's Produce tens of thousands of dollars.

"I don't care what she confirmed, she's lying," Paul Pontillo said. "Ly-ing. Lying. OK? It's nonsense. We spent three hundred bucks a week with her. (On) Produce. How many weeks would she let us go to come up with this number?"

When John stopped working for Pontillo's Pizzeria, Batavia, in February 2008 (more on that later), he says the restaurant owed very little to its vendors, including Dave's Produce.

He doesn't have a hard time believing, though, that eight months later, the amount of money Pontillo's owed to Kathy Pettinella was approaching $70,000.

John said after several suppliers stopped sending product to Pontillo's, Kathy stepped in to help, going to the Clinton Bailey Farmers Market in Buffalo, buying cash-and-carry produce for Pontillo's and delivering it back to Batavia. She became the shop's main supplier.

When asked how she could allow one client to run up such a debt, Pettinella said she thought she was doing a favor for a fellow local business owner.

For Donald Will, owner of Will Poultry Co. in Buffalo, it wasn't a favor, it was an oversight.

When asked how Pontillo's allegedly rung up more than $40,000 in unpaid bills with his company, Will said, "I'm embrassed to say, poor controls on our part."

The Will Poultry Co. company ended up writing off $32,000 of unpaid bills from its Pontillo's account.

Another vendor, Dave Genecco, of Genecco Produce in Canandaigua, said the $8,000 listed on the debt document as unpaid bills owed to his company is wrong. Pontillo's actually owes him $12,000, he said.

His response to the prospect of never getting paid, "I'm f__ked." And after a long pause. "I'm the f__kee." He then hung up the phone.

"A lot of hard-working people got screwed," said John Pontillo, blaming Sam for the financial mess. "What bothers me is, he comes back to Batavia with no shame."

"But," John adds, "he won’t ever use any of those distributors again."

Paul is sanguine about the vendor debts. First, he says, the debts on the estate document are just the normal operational float of Pontillo's on a monthly basis (excluding the amount allegedly owed to Dave's Produce). Second, none of the debts really attach to the estate under corporate law, so they're not much to worry about.

"That's corporate debt," Paul said. "It has nothing to do with the estate matter. The corporation doesn't survive (in a legal sense). The only way that could be attached to the corporation is through trust taxes, such as sales taxes if the state wants to make a claim on the estate, meaning my mother, which it never did, because she hadn't been in the restaurant in years.

"She wasn't an officer. She wasn't an operator. She was just an owner. Personal guarantees. There were none that I know of on any of those debts. Any type of fraud -- there was none. An alternate identity -- there wasn't (one). The business has been around in some form or another since 1947, and well funded.

"The four ways to pierce that corporate barrier were nonexistant here. At least no one has ever come to court and made a claim on any of this. So none of this matters, otherwise they would have judgements against us, and none of them do."

Taxes
Unpaid taxes seems to be a family tradition with the Pontillos.

There have been tax liens filed against Pontillo's business interests going back to the 1990s, well before Salvatore died in 2006, though most of the public record points to tax problems beginning after his death.

A search for tax liens on the New York state database turns up liens of $83,671 and $21,944 from 1996 against Paul J. Pontillo and a pizzeria he operated in Brockport. There is another lien from 1998 for $29,276.

The initial $112,000 in back taxes that The Batavian first reported in November 2008 are still listed there (here, here, here, here and here). So is a new lien against Paul and Pontillo's Pizzeria from March 2009 for $60,699, and one against Sam and Pontillo's Pizzeria from June 2009 for $25,999. Sam Pontillo and his wife, Karen, have a recent lien, March 23, 2010, not attached to any of the business entities, for $3,832.

Also of recent vintage is a $97,009 federal tax lien against Sam's Tomato Pies, Inc., filed Jan. 26, 2010. (Available through the "other debtor" search on this page.)

Old liens listed as satisfied include $35,112 from 2005, plus two totalling about $9,000 from 2005. This page shows two liens satisfied in 2005 for $67,700. The Le Roy Pontillo's had a tax lien filed in March 2009 with a satisfied date of May 2009, but the same page lists another lien for about the same amount, filed on the same date, that is not shown as satisfied. This page shows satisfied liens against the Le Roy Pontillo's for $33,000.

In total, if the government Web sites are accurate regarding the unpaid liens, the various Pontillo's entities still owe the feds more than $322,000. John said he doesn't believe any of these back-tax issues shown as outstanding have been settled.

Among the other unpaid taxes related to the Pontillo's empire in Genesee County are property taxes owed on the Le Roy Pontillo's location. The past three years of unpaid taxes now exceed $23,000, according to County Treasurer German.

Tax indebtedness is exactly what seems to have led to the eventual loss of the family business in Batavia.

In October 2007, with Betty's blessing, the corporation took out a $350,000 loan (a figure provided by John) from New York Income Partners/Monroe Title, with the majority of the funds being used to pay off back taxes.

According to a document in the Pontillo v. Pontillo lawsuit, checks were written against the loan to the U.S. Treasury for $116,120, $28,073 and $62,417. There were also checks paid out for various document and legal fees and $30,000 in loans to Betty. Otherwise, John said, nobody knows what happened to the remaining balance of the loan.

The loan was taken out against three parcels: The two parcels that comprise the Batavia Pontillo's location on East Main Street, and a residence at 64 Vernon Ave., as well as the equipment inside the Batavia pizzeria.

Probate records say the Pontillo's location, which comprises a handful of tax parcels, is worth $687,000. The most recent assessment of the  Vernon Avenue residence is for $114,000.

Monroe Title's parent company foreclosed on these properties last summer and bought them back at auction for $490,000 (a purely paper transaction, since the company was paying itself for the real estate). The Batavia Pontillo's location was then sold at the end of December to developer Tom Masaschi for $400,000 and the Vernon Avenue home recently sold for just under $100,000.

“When they foreclosed on those two properties, that was my inheritance," John Pontillo said. "It’s gone. They borrowed the money and mortgaged my future inheritance and they walked away from the note. I was out."

Corporate Structure
In November 2008, the Batavia Daily News published a story about the Pontillo's Pizzeria in Batavia being closed for renovations.

A day later, The Batavian broke the story that there were more than $112,000 in tax warrants against Pontillo's. The follow-up story by Joanne Beck labeled The Batavian's story as "rumor" and asked Sam to respond (note: Sam never responded to an interview request from The Batavian for the November 2008 story).

"I do not own that one," Sam said, pointing west toward Batavia from the Le Roy Pontillo's. "I own this one. We're settling the estate."

Sam declaimed any responsibility for the Pontillo's in Batavia.

The business is still owned by his mother's estate and was not run by (me), Sam said.

"I was locked out of the whole operation," he said. "John and Paul worked there. John was operations manager."

However, John didn't work there. He had been fired in February 2008. Paul was involved in the daily operations of the Batavia Pontillo's -- he certainly wrote the checks -- and was president of Sam's Tomato Pies, the corporate entity operating the restaurant for the Pontillo's Family Partnership.

But John points out, Sam was the treasurer.

"Sam will say, ‘I was in Le Roy. I didn’t know what was going on,’" John said in an interview last week. "Sam was the treasurer. He didn’t do his job. He didn’t know what was going on. He was warned repeatedly by people in that building, telling him that people were coming in looking for money.

"Sam was the treasurer. It was his responsibility to make sure these bills got paid. He didn’t do his job and he knew exactly what was going on. He can claim ignorance all he wants. It’s not a defense in this case."

Sam's Tomato Pies was incorporated in April 2007 with a corporate address of 3 Mohawk Trail, Slingerlands, N.Y., where Sam and Karen own a home. In September, LeRoy Dough Boy's was incorporated with the same corporate address.

Both of these corporations were then filed as DBAs (Doing Business As) at the Genesee County Clerk's office for the Pontillo's Family Partnership.

According to court documents, the Pontillo's Family Partnership is owned primarily by Betty's estate, at 64 percent. Sam, John and Paul each own 12 percent.

The sole shareholder of Sam's Tomato Pies was Betty. Paul was president and Sam was treasurer.

The ownership structure of LeRoy Dough Boys is one of the contested points of the Pontillo v. Pontillo lawsuit. The complaint contends that Sam set up LeRoy Dough Boys to operate the Le Roy pizzeria with Sam as the sole shareholder and president. Paul is listed as the treasurer (Paul says he never agreed to be a corporate officer in LeRoy Dough Boys).

John says he was never an officer in any of the companies, only an employee. He was operations manager in Batavia until February 2008.

Why was John fired?

Paul says it was a family dispute he won't discuss. John says it's because he was cracking down on some of the loose spending going on -- Paul was drawing a salary without working in the business, Betty was demanding $2,000 a month in payments and, according to both John and Paul, Sam was taking paper products and produce from the Batavia operation for the Le Roy location without paying for it.

The real break came, John said, when Paul tried to use starter checks from M&T Bank and he intervened; however, there have been persistent rumors that John was accused of stealing.

"(Paul) flipped out," John said. "He convinced my brother Sam to join forces with him and that’s when they got rid of me. That’s the truth. I never stole a dime from that restaurant."

Bad Checks and Big Debts
Talk with Paul about the debts and there seems to be only one villian in the case: brother Sam.

"My brother Sam is a crook from day one until now," Paul said. "He's never had an honest day in between. He's a glad-handing, back-patting, son-of-a-bitch. It's all he is. I hate to say that about flesh and blood, but you gotta say enough is enough. I'm not saying I'm an alterboy, but I don't screw my family over like this."

John doesn't put all of the blame on Sam for the debts; mainly, he says, he knows that most of the bills that had piled up prior to him taking control of the finances, were paid down by the time he departed Batavia for a job at a country club in Minnesota.

"I have a packet that I’ve been holding, in case I need to use it," John said. "In it, are statements from all of the distributors from the time when I was let go, about just where we were financially. We were pretty much right on the money. We were almost current. Then it was Pauly and Sam who drove that thing up in just eight months to about a half-million dollars in unpaid debts."

The degree to which Pontillo's in Batavia was operated in debt prior to John's employment as operations manager is not clear, but interestingly, in the probate records for his father's estate, there is mention of a judgement against Salvatore Pontillo out of Erie County for $48,000. The record also shows U.S. Food Services was eventually paid in full.

Both John and Paul say Sam wasn't paying rent for the Le Roy location and that he would regularly show up at the Batavia location with his red Pontillo's delivery fan, stuff it full of paper and product and head back down Route 5 to Le Roy.

All told, between rent and supplies, Paul estimates Betty's estate is out about $1.1 million.

"Ouch!" Paul says. "We do OK, but that's a big nut. That's why there's this number (pointing to the estate's debt memo). That's why after every time Sam takes over a business, two years later, here come the tax people."

From the time Salvatore died, Paul says he was at the Vernon Avenue residence taking care of his mother. He said he was in the restaurant so infrequently that employees didn't even recognize him when he did show up. He said after John left, Sam was in Batavia regularly.

But it was Paul, still president of Sam's Tomato Pies, writing the checks and paying the bills.

Two of those checks led to criminal charges against Paul.

Willowbrook Farms, listed on the Pontillo's Pizzeria debt document as being owed more than $10,000, turned over two bounced checks allegedly signed by Paul to Genesee County prosecutors. Each check is for more than $3,500. (A manager for Willowbrook declined an interview request for this article.)

The case is still open and attorney Jerry Ader has filed a motion for dismissal on the grounds that charges were not filed quickly enough under provisions of "speedy trial" rules.

Paul says he will accept whatever consequences come his way for the bad checks, but he blames Sam for the situation.

"I’ll take my licks because of any checks I’m accused of writing and signing, OK," Paul said. "I did it? Fine, my responsibility. But why? I wasn’t putting that money in my pocket. And 'the why' came from the theft of my brother."

According to available public documents, Willowbrook Farms is only one of three suppliers to take legal action based on apparently unpaid debts.

Turnbull Heating and Plumbing has an active mechanic's lien against the estate for $1,100 and Gilmartin Funeral Home has a pending lawsuit against Paul and Sam for more than $10,000 in alleged unpaid bills for Betty's funeral. (John said he believes $8,000 of that bill has been paid from the proceeds of sale of property the estate owned at Richmond Avenue and Oak Street, however there's no record of payment either in the court case or the probate file.)

Meanwhile, Paul, who teaches economics at GCC, says he's splitting time living with two friends. On the day we talked, he said he only had enough money for two more days of meals and payday was at least five days away. Though he once owned a home at 11 Lewis Ave., there's no indication that he owns any property in Genesee County now. Without a car, Paul said he walks everywhere he goes, including to the college.

"(Sam) went to Italy last summer," Paul said “He’ll get on a plane like you get in your car. He’s got a big $300,000 home in Albany. I don’t even have a bike."

The Pontillo's Name
The ads on WBTA radio say, "Pontillo's Pizzeria is now open," but Paul says it's not really Pontillo's.

He said he doesn't believe Sam buys quality ingredients, and with apparent plans to include a full bar -- beer, wine and hard liquor -- it won't sustain its family friendly tradition.

"It’s not Pontillo’s any more," Paul said. "It’s really not. The people should know that. The family isn’t there any more."

And unless Sam has a significant ownership interest, it's not clear that the current ownership can legally operate as "Pontillo's" anything in Batavia.

The federally registered trademark is owned by Anthony Pontillo's estate and is licensed to 22 pizzerias in the Rochester area.

Paul said Anthony and Salvatore had an agreement allowing the Batavia family exclusive rights to the Pontillo's trademark in Genesee County.

Those rights are retained, according to both John and Paul, and it's a point in the Pontillo v. Pontillo lawsuit by Betty's estate.

“What they’re doing up the street right now is illegal. It’s illegal," John said. "They cannot show you anywhere on paper their right to operate under the Pontillo’s name in Batavia. We’ve got an e-mail out to the lawyers right now. We’re hoping that they’ll get something in court to take that name away from them.”

Paul thinks that the Rochester investors are angling to establish "Pontillo's" as a common-law name, which would allow them to open additional Pontillo's pizzerias in Monroe County. He said it's the responsibility of the estate to fight to retain ownership of the name, but he isn't convinced the estate administrator, John L. Forsyth, is ready to do that.

Anthony's son, Dave Pontillo, called the situation with his cousins unfortunate, but said he had no comment on the trademark issue other than "we're evaluating it."

While John Pontillo says that Sam has indicated he has an ownership stake in the new Pontillo's, Paul doesn't believe so. Paul said he believes there's an employment contract between Sam and the Rochester partners clearly defining Sam as a manager and nothing more than an employee.

"When these guys (the Rochester partners) have had enough of my brother, when they have the name, if they get the legal rights to the name, they’ll wave goodbye to him," Paul said. "They won’t need him any more. They won’t need him at all."

As for the future of Pontillo's in Genesee County, John clearly wants to operate a Pontillo's Pizzeria locally. He has scouted for locations in Batavia. 

In 2009, according to probate records, John offered $400,000 to the estate for the Vernon Avenue residence, property on Oak Street and the Batavia location. Attorney Brian P. Degnan expressed concern in a motion filed with the court that the $400,000 would not cover all of the estate's debts (which included the mortgages on the property at the time), and because Betty's final tax returns had not been settled yet, that would leave the heirs personally responsible for an unknown, possible tax burden.

The offer was not accepted and eventually Monroe Title foreclosed on the property.

However, John Pontillo may also soon gain control of the Le Roy pizzeria. Paul said, and John confirmed, that John has a signed purchase agreement with Forsyth for the 64-percent interest of the estate in the Le Roy land and building. If the court evicts LeRoy Dough Boys and Sam Pontillo from the location, John hopes to take over operations of a Le Roy Pontillo's.

Pontillo v. Pontillo
It's more than a war of words between the Pontillo brothers. It's also a legal battle.

Sam and Paul are defendants in a lawsuit filed April 1 by the estate of Elizabeth Pontillo.

Estate administrator Forsyth is a CPA in Batavia. Local attorney Degnan is representing Forsyth and the estate.

John Pontillo is not directly a party to this lawsuit, but he filed a suit against Sam in 2008 and says he may yet pursue further legal action against Sam.

While Paul is a co-defendent in the new lawsuit, most of the accusations in the complaint are aimed at Sam.

The suit accuses Sam of unjust enrichment, breach of partnership fiduciary duties, breach of duty of loyalty, corporate waste, self dealing and unpaid rents, among other items.

There will be a hearing on April 30 on an order to show cause, asking the court: to prevent Sam from removing equipment from the Le Roy location for the Batavia location (already granted by Judge Robert C. Noonan according to John and Paul); that Sam not be allowed to enter the Le Roy location: that Sam and LeRoy Dough Boys be evicted from the Le Roy location; that Sam be ordered to return any equipment removed from the Batavia location (prior to foreclosure) to the estate; and that Sam be required to pay back rent and 64 percent of the profits accrued since August 2008 to the estate.

The suit also asks that Paul be ordered to provide an accounting for antiques from the Vernon Avenue residence that he allegedly sold and that he pay rent for the time he lived there after his mother's death.

In an affidavit filed by John Forsyth, Forsyth makes the following claims:

• That Sam Pontillo fraudulently took control of the Le Roy location, with the creation of LeRoy Dough Boys with him as sole shareholder, because Sam did not pay Pontillo's Family Partnership for the business. Forsyth calls the deal creating LeRoy Dough Boys and making Sam the sole owner of the Le Roy business "a sham, fraudulent, and not an arm's length transaction and must be undone by the court."
• That the Le Roy pizzeria sold its equipment to LeRoy Dough Boys as part of a settlement agreement with the IRS. The equipment, Forsyth contends, was not Sam's to sell and rightfully belongs to the estate of Elizabeth Pontillo.
• Sam, according to the affidavit, admits to removing equipment from the Batavia location (in an attached e-mail purportedly from Sam, Sam says he took the equipment for safekeeping). Forsyth contends Sam did not have permission to remove the equpment.
• That Sam Pontillo is a partner in the new LLC operating the new Pontillo's Pizzeria at 500 E. Main St., Batavia.
• That Sam Pontillo has not paid rent for the Le Roy location since the death of Elizabeth Pontillo. The lease, according to Forsyth, calls for $30,000 a year in rent payments. Sam owes the estate, according to Forsyth, $50,000 in back rent.
• That the new business is in direct competition with the Pontillo's Family Partnership.
• While the affidavit claims that Sam Pontillo signed the mortgage that Monroe Capital (U.S. Income Partners) eventually foreclosed on, the copy of the mortgage on file with the Genesee County Clerk's Office was signed by Elizabeth Pontillo.
• That Sam and Paul were responsible for ensuring the mortgage was paid but did not, leading to the foreclosure. 
• "As a result of Defendant's actions," Forsyth writes, "the Estate lost this (the Pontillo's Batavia location) due to breach of the Defendant's duties."
• Forsyth accuses Paul of illegally residing at 64 Vernon Ave. after the death of Elizabeth Pontillo, and of selling, without permission, various items from the home and also of allowing third parties to live in the house without paying rent.

While John is not a party to this particular lawsuit, he said there's really only one question he wants answered: What happened to all the money?

"When you ask that question, they run like mice," John said.

"When I talked with my brothers, I said, ‘where’s the money?’ And they were like this. They were like (shrugs)? Nothing. Not a word. I said, ‘Guys, you understand somebody has got to be held responsible for this.'"

Photos: Top, Pontillo's at 500 E. Main St.  Picture taken the day of publication of this article; Inset right, John Pontillo; inset left, police mug shot of Paul Pontillo; inset right, the Pontillo's location this winter when Sam was preparing the location to be reopened and the sign was uncovered; inset left, 64 Vernon Ave.

The Genesee Valley PennySaver's Batavia office has moved from Ellicott Street to a corner location and Liberty and East Main, Downtown Batavia. The staff was in the office this morning getting the new location set up.  Pictured are Brittany Walker, left, Drew Muehlig, Leanna DiRisio, Becky Michalak, Ethan Biscaro, Chris Harrison (back) and owner Steve Harrison.

Too many times, says Tim Walton, people would call him about a possible T-shirt order, ask about bringing something by his place of business, and when they found out he was working out of his garage, he'd never hear from them again.

"People thought, 'oh, he's just a teenager, so it's just a hobby for him," Walton said.

That's why Tim decided to open a shop on Main Street -- he figures it will help potential customers take Topline Shirt Company more seriously. In just a week since opening, Walton said, his walk-in traffic has increased.

The front of the retail shop -- in the former space of Millenium Computers (214 E. Main St.) -- will be a retail retro clothing shop operated by Rob Credi. The shop will be called Retro Reserve. Credi and Walton hope that by combining efforts now, it will help both of their businesses grow.

Tomorrow, Saturday, Walton and Credi will host an open house from 10 a.m. to 3 p.m. for their two businesses.

NOTE: This is an updated version of the story that corrects the implication from the Albany Times-Union story that the Batavia Kmart was involved, and the error in the TU story that warning letters were sent to the stores.

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Six grocery stores in New York -- including one in Batavia -- were notified by the state that some fish products the were selling were apparently overpriced.

The allegation is that the stores were selling seafood packed in ice, and the ice was being weighed so that consumers were paying not just for filets and shrimp, but ice as well.

The Batavia Tops was one of the six stores asked to remove products from its selves and either re-label the packaging or return it to the distributor, a company out of New Jersey, according to Jessica Ziehm, spokeswoman for the state Department of Agriculture and Markets.

Tops reportedly sold fish fillets packed in ice that was counted as part of the weight.

Press release available here.

To commemorate the last steel beam being put in place on UMMC's $19.5 million expansion, the hospital held a "topping off" ceremony this afternoon.

A worker placed a flag -- for national pride -- and an evergreen tree -- for growth -- atop the beam.

The beam was painted white and signed by employees, administrators and board members.

When completed, the expansion will add 44,000 square feet to the front of the hospital on the North Street side. Construction is expected to be completed in December.

After 15 years of working for other people in the home-improvement business -- both as a hired hand and in sales -- Tim Stoddard began to get the itch to do it himself.

"My wife Lisa was a big instigator of it," Stoddard said. "She kept telling me I could do it.”

So he enrolled in free classes from the Small Business Administration at Geneseo College and began planning what would become American Home Remodeling.

Ten years ago, Tim and Lisa launched their company with a vision for a firm that would be known for its quality and its personal attention to customer care.

"We didn't need to be a big fish," Stoddard said. "We didn't need to be the biggest company out there. We wanted to be a company known for honesty, doing the right thing and having the right people in place."

In part, that's how the name of the company came to be. American Home Remodeling sounded to Tim like a name that would stand for quality. It also helped that the company name would begin with "A" so it would be at the top of Yellow Page listings.

The company name also led to one of American Home Remodeling's signature marketing features -- its fleet of trucks painted in patriotic red, white and blue.

Lisa's cousin paints murals professionally and one day Tim asked her, "Can you make my truck look like it ran through an American flag?" She said she would give it a try.

The company now has four flag-painted trucks, each one a little different, he said.

"I went to the bank to make a deposit one day and a lady came up to me and said, 'Are you the fellow with the flag truck?'" Stoddard recalled. He said he was. "She said, 'I looked at the truck and I looked away and then I looked at it again and I thought, it's not offensive at all.'"

Stoddard said that's when he knew the trucks were helping project an image of a reputable, local company.

American Home Remodeling's bread-and-butter business, according to Stoddard, is roofing and siding, but he's also proud of his carpentry department, which allows him to take interior and exterior building jobs.

The siding business isn't about taking any job and putting the least expensive siding on a house, in keeping with Stoddard's goal of being a reputable mid-size business.

Stoddard said his company uses top-of-the-line materials and tries to maintain the character of the house. For example, the slats of the siding will match the width of the original wood clapboards, and if the house had gingerbread shingles, that decorative feature will be retained.

"I don’t do many rental homes because we’re too high for rentals," Stoddard said. "They want to go with the cheapest product they can in most cases. We don’t really want to have jobs out there with our name on it that look like that."

The Stoddards clearly have a love for Batavia's older homes. They live in -- and are restoring -- one of the Homelius-designed houses on Ellicott Avenue -- and in 2004 they purchased the Doty Mansion at the corner of Jackson Street and Highland Park.

In 2006, they completed the major indoor renovation of four apartments inside what was once one of Batavia's grandest residences (maybe only the long-ago destroyed Richmond Mansion could beat it).

The Stoddard's bought the mansion with only $5,000 down, with the previous owner carrying the mortgage and a bank financing more than $50,000 in restoration work.

"Once we went into the Doty Mansion, it was just a mess," Stoddard said. "It was just HUD. There was no heat into two of the apartments for two years. They had space heaters. There was raw sewage coming from the upper apartment to the lower one.

"We started demo’ing and you could see past all the dirt and debris that it was really a nice house at one time," Stoddard added.

At first, buying the Doty Mansion was just an investment. For the price, the Stoddard's figured they could fix it up and rent out the apartments to reliable tenants and turn a profit, but the restoration work had unexpected benefits for American Home Remodeling.

Through the work, the Stoddards tapped into a regional network of specialists in woodworking, masonry, stained glass and other specialties.

"Now, I’m not really too unsure of myself or afraid to try stuff," Stoddard said. "There’s so many people out there whom I now know who can do special things. It was kind of a blindfolded thing. I didn’t realize how beneficial it would be by working on that mansion."

There isn't enough restoration work in Batavia, Stoddard said, to make that a focus of American Home Remodeling, but he thinks that if more people knew the option was there -- even though it can be expensive work -- they might take that approach with their older homes.

"Somebody might have molding that is really ornate plaster, but bits and pieces are broken," Stoddard said. "If they knew we could come in and save that and restore it, then I think they would entertain that idea. I think a lot of people don’t realize it can be restored and fixed so they turn around and get rid of it."

But whether through renovations, siding or roofing, American Home Remodeling has been growing, Stoddard said. He projects this year the company will gross $1 million for the first time.

During peak building season, Stoddard said he employs as many as 18 people, and that's as big as he wants to get.

"We had 22 one summer, our fourth year in business, and I was just pulling my hair out. It got to be a little too much to deal with," Stoddard said.

Photo: Tim Stoddard, right, talking with the owner of a home his company re-sided for the previous owner.

Though a retired physician living in Florida I am a native Batavian with more than a passing interest in the discussion of the taxation issue involving the L.B. Grand restaurant in LeRoy.

After giving considerable thought and engaging in review of some New York State journals and available news reports I made the effort to read  some of the formidably redundant tax code.  Then, following a quick review of statistical methods, I made an unsuccessful attempt to obtain the statistical method employed in the state Tax Code.
Any questioning of the bureaucracy,as you could guess, resulted in the usual government endless merry-go-round.

Some facts however did surface and these I want to share so the New York State Department of Taxation motives will be a little more transparent.

Years of state deficits and unbalanced budgets have created the need for the Tax Department to collect more so that cuts in budgets could be avoided.  In New York there exists a budget deficit greater than $8 billion dollars.

The top tax  enforcement official, William Comiskey, with the backing of Legislators and Govenor Patterson have unleashed the Department of Taxation and Finance to radically increase the number of audits on small businesses to build the state coffers.

Thus far the goals do not imply anything unreasonable.  However, the methods utilized and the individuals who have been hired in increasing numbers to levy these audits create serious skepticism.  Dubious sampling methods defy statistical plausibility.  These methods include one day samples which are inexplicably extrapolated to define years of income.

That method would be tantamount to estimating the average daily temperature in Batavia, N.Y. by taking a sample of one day then applying it to all days, in all seasons, for three years.  Sound crazy?  It is!   This method may be employed if a small business cannot produce records that the Tax Department considers acceptable and that includes receipts that have been carefully saved but have faded because the vehicle was thermal paper.  Such is the case with L.B. Grand Restaurant.

As stated by a N.Y. tribunal ruling on such a case, “A lack of records does not equate to a presumption that taxable sales have been underreported.  This does not give the division carte  blanche to simply extract convenient mumbers from an index and use them in a manner for which they were never intended.”

The target of such oppressive techniques would  be forced to resort to legal help at a huge  expense.  In many instances this has resulted in dismissal of the claims made by the Tax Department.  In the case of L.B Grand an alleged underpayment of sales taxes amounts to $247 thousand over three years has been decided even though gross receipts are approximately $500 thousand per year.  Sound crazy?  It is!

Involving tax attorneys would be certain to alleviate and possibly get rid of the charges.  Isn’t it amazing that a charge made with certainty by the State could almost inexplicably be made to go away?  Isn’t that a scary concept?   Pay the bill to the state or get a lawyer and he could make it disappear----for a staggering sum paid by the accused to preserve innocence.

Where does this place the small business owner?  I will not pander  your emotions though the overwhelming  mental anguish and suffering of  the innocent is palpable to me.

Think it over.  Can all of this really be happening?   In America?