NEW YORK (Reuters) - The FBI has arrested the town supervisor of Ramapo, New York, whose municipal bonds have been at the center of an investigation of potential securities violations, an agency spokeswoman said on Thursday. A lawyer for Christopher St. Lawrence, the town supervisor, did not immediately respond to a request for comment. He is expected to appear in federal court later in the day. Without naming St. Lawrence, the office of U.S. Attorney Preet Bharara in Manhattan issued an advisory saying he would be announcing charges against two people in what is believed to be the first municipal bond-related securities fraud prosecution. The Federal Bureau of Investigation searched Ramapo's municipal offices in 2013 after an audit by the New York state comptroller's office in the previous year criticized the town's funding of a minor league baseball stadium that it said could leave taxpayers on the hook for $60 million. The stadium was financed through the Local Development Corp, a private, not-for-profit entity in Ramapo, which is located 28 miles northwest of New York City and whose population was 126,595 as of the 2010 census. During the May 2013 operation, the FBI seized material on the town's finances since 2009 and bonds issued by Ramapo and the Local Development Corp. The FBI also seized correspondence with Ramapo's auditors on the town's financial statements, according to bond documents. The U.S. Securities and Exchange Commission issued related subpoenas, including in May 2014 to the town, Local Development Corp and St. Lawrence, who has been a corporation director. Federal prosecutors under Bharara have indicated in court papers that the probe is also connected to a lawsuit filed in 2014 by former Ramapo finance official Melissa Reimer against Ramapo and St. Lawrence. In the lawsuit, Reimer said she had been retaliated against after speaking out about what she believed was a $32 million overstatement by the corporation. She said she had been talking to the FBI since 2012.

• published: 14 Apr 2016
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