WNY BOE terminates Alamo Insurance in midst of dual investigations

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The West New York Board of Education terminated their contract with Alamo Insurance at Wednesday’s meeting by a vote of 4-3-1, in the midst of dual investigations by the state Office of Fiscal Accountability and Compliance (OFAC) and the FBI regarding whether or not insurance contracts were properly approved by the board.

WNY BOE

By John Heinis/Hudson County View

Trustees Silvio Acosta, Nasrin Alam and President Steven Rodas voted no, while trustee Lorena Portillo – who was voted onto the board just minutes earlier – abstained.

Trustee Matthew Cheng made a motion to terminate the contract towards the end of the over four-hour meeting, and despite opposition from Rodas and legal counsel John E. Croot, Jr., the matter was taken seriously after Superintendent of Schools John Fauta explained the magnitude of the situation.

“OFAC did contact us, they are seriously looking into this matter. They are threatening to take funding away, and like Matthew said, commissions. This is a serious matter,” Fauta emphasized prior to the vote.

“OFAC is requesting information from us and they did say, if they find us in violation, we’re going to have to pay all those commissions back. This is a fact.”

Cheng stated that a violation could cost the school district somewhere in the neighborhood of $1 million.

“And what was stated before is that in fact, in the last three years, we’ve paid nearly $1 million in commission fees,” he said.

Earlier in the meeting, Cheng cited a board of education matter out of Deptford, a south Jersey municipality that was hit with $32,000 in fines from OFAC for improperly awarding an insurance contract that ran from March until June this year (h/t South Jersey Times).

Their insurance broker of choice? Alamo Insurance.

A subsequent motion to re-appoint Brown & Brown Metro, who previously accused Alamo of interfering with the RFQ process at the WNY board of education, as the insurance brokerage of choice failed.

Fauta announced at last month’s meeting that OFAC was investigating the process how the the board chooses insurance firms,  while only Hudson County View has revealed that the FBI is investigating the same situation.

Alamo Insurance could not immediately be reached for comment on the matter.

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