The general contractor building Kathleen’s Tea Room, owned by Peekskill Mayor Vivian McKenzie, finds himself in a court dispute over $74,292.14 that a subcontractor on the job claims is owed to him.
But that number is chump change compared to the $18.4 million that Anthony P. Frascone admits he owes to creditors in a January 2024 Chapter 7 Bankruptcy filing in U.S. District Court.
According to the bankruptcy documents, Frascone personally owes the New York State Tax Department $12.57 million, $2 million to MDG Design and Construction, $1.38 million to Travelers Insurance and $532,964 to the IRS.
His bankruptcy attorney told the Peekskill Herald that as of Sept. 24 no objections have been filed to discharge the case and that he expects a discharge is forthcoming. When reached by the Herald, Frascone declined to comment on his bankruptcy case.
‘Breaking ground’ on a shaky financial base
On March 13, 2024, Frascone was present as his company Full Spectrum Building Group attended a groundbreaking ceremony at the Kathleen’s Tea Room site at 979 Main Street. Mayor McKenzie, the building’s owner, wielded one of the honorary shovels to turn the first dirt.
Referencing the Bible at the ceremony, Frascone spoke of the need to endure and not grow weary. He mentioned McKenzie’s kindness and gentleness, saying he’d never met a mayor like her before and that he’d met a lot of mayors. “It’s not about the money, it’s about people and relationships,” said Frascone. He estimated construction would finish by the end of 2024.
But what Frascone knew that day, and the Mayor apparently did not, was that two months before that groundbreaking he filed a petition in bankruptcy court citing debts of $18.4 million and claiming assets of $11,896.
Adding to the challenges he faced that day in March 2024 was a criminal indictment hanging over his head filed by the Rockland County District Attorney two years earlier, charging him with insurance fraud and two counts of grand larceny. Those charges arose while he was owner of his previous company, Alpha-Omega.
However, Frascone did seem to enjoy his 15 minutes of fame later in 2024 when he won a place on the Working Families Party line in the race for a seat in the U.S. House of Representatives representing the 17th Congressional District.
Construction work continues on Kathleen’s
Kathleen’s Tea Room is expected to be completed in three to six months, according to Mayor McKenzie and project architect Joe Thompson.
The one-story building housing Kathleen’s Tea Room at 979 Main St. was razed after a roof collapse in 2021. The new Tea Room will occupy the ground floor commercial space, with seating for 40, while each of the two upper floors will house apartments.
McKenzie, who has owned and operated the café since 2010, told the Herald apartments at the building should be completed in mid-October 2025 while the Tea Room could be completed in December 2025.
“Constructing a new building can often take longer than a year, and from the outside it looks like there hasn’t been much done in the past several months,” Thompson said. “But inside there’s a lot of finishing work happening.”
Thompson said the apartment units are scheduled to be completed in fall 2025 and estimated the kitchen and Tea Room would be completed in the first quarter of next year. He added they’re working with the general contractor to resolve any issues to complete the project.
The current dispute over payment is between Frascone and Katonah Construction, a subcontractor he hired to install a storm water line, a sewer line, and a water line.
Katonah Construction filed a mechanic’s lien on Sept. 16, claiming Full Spectrum Building Group hasn’t paid $74,292 for work performed and is five months past due on the payment. [A mechanic’s lien is a legal claim filed against a property for unpaid work or materials. It serves as a “hold” on the property and can lead to a court-forced foreclosure sale to satisfy the debt.]
According to the lien, material and labor were furnished at the site from April 28 to July 18. The agreed price was $130,292 but $74,292 remains unpaid, the lien claims. Full Spectrum is disputing the amount of money that Katonah Construction is demanding.
Brandon Gordon, president of Katonah Construction, told the Herald he was frustrated the Mayor would not take his phone call or meet face to face.
“At the end of the day, it’s your property,” Gordon said of McKenzie. “It’s not like we didn’t do the right job. It was all inspected, the permits got closed out, all functional, everything done as per plans, as per code – $74,000 could bankrupt most people. That’s a horrible thing to do to somebody.”
However, McKenzie told the Herald, “The issue is between the general contractor and the subcontractor, not me. I have one contract with my general contractor. So my understanding is that they are working it out, but I do not have anything to do with the subcontract.”
Full Spectrum Building Group is also working on a Downtown Revitalization Initiative (DRI) project for the Hudson Valley Gateway Chamber of Commerce headquarters, at 1 South Division Street, to replace the modern facade with the original, historical design, install new signage and lighting, and improve the lobby area.
The $70,000 project started last October and saw some delays due to weather, including snow over the winter and a heavy rain season, according to Chamber of Commerce Executive Director Carole Voisey.
Voisey told the Herald the last thing they’re waiting for is installation of the customized doors, expected to arrive in the first week of October. Following that, a grand opening is planned for the new tourist center with a new electronic kiosk.
Legal troubles, numerous debts pile up on Frascone
On Jan. 13, 2022, the Rockland County District Attorney charged Frascone, then the principal owner of Rockland County-based construction company Alpha-Omega, with one count of first-degree grand larceny, one count of second-degree grand larceny and one count of first-degree insurance fraud.
According to the grand jury indictment, Frascone got workers’ compensation insurance from Travelers Insurance Company in 2016 by claiming he was operating a real estate business with one employee. After investigating, the D.A. determined that he was actually running a construction company with more than 90 employees and a payroll over $8 million.
Based on the false information he supplied to Travelers, Frascone paid an insurance premium of $403 when he should have paid $1.49 million, according to the D.A.
After Travelers declined to renew the policy, Frascone applied for insurance with another company, The Hartford, and told them he had one clerical employee and got a new policy with a premium of $328. The Hartford canceled that policy after three months. The DA determined the premium for the three-month policy should have been $233,463.
According to records in the Rockland County Clerk’s office, the District Attorney’s office reduced the criminal charges and Frascone pled guilty to one count of petit larceny in November 2022. Part of the plea deal required restitution of $1.6 million.
Frascone told the Herald he only pled guilty to one misdemeanor charge in the criminal case. “I’m not a criminal. I know you guys want to make me look bad. I understand that,” he said. “Restitution was not part of the settlement. The settlement was thrown out and the case was dismissed. Well, I guess there is [judgment on the clerk’s records]. I don’t know about that – I have my attorney handling it.”
Asked to comment on the plea agreement with Frascone, Rockland County District Attorney Tom Walsh II told the Herald, “Restitution is a critical part of accountability and I’m proud of the work my office and our partners put forth on the case.”
When contacted by the Herald, the attorney for the Travelers, Tom Martin of Bond, Schoeneck & King, said he was not aware that Frascone had filed Chapter 7 bankruptcy.
Section 523(a)(7) of the Chapter 7 U.S. Bankruptcy Code makes most government fines, penalties, and forfeitures nondischargeable, meaning they cannot eliminate those debts through the bankruptcy process.
There are 35 separate creditors listed in the Chapter 7 filing.
Other debtors named include: American Financial Center Inc., $200,000; Bricklayers and Allied Craftworkers, $191,620; Caterpillar Financial Services, $235,339; HD Supply Construction, $259,998; Mason Tenders District Counsel, $101,692; ML Factors Funding LLC, $82,590; RC Probation Department, $217,213; Triboro Contractors Supply, $108,659 and the New York State Workers’ Compensation Board, $84,000.
The White Plains law firm Trivella and Forte LLP won a $82,895 judgment in Westchester County Court in July of 2024 for legal services provided in a March 2021 civil case filed against Frascone and his company, Alpha Omega Building Consultants.
According to court records, Frascone previously filed for Chapter 7 bankruptcy in September of 2011.That case was closed in March of 2014.
Frascone said he once saved the life of a three-year old autistic child who he spotted walking in the middle of the road. He said he serves as a non-escorted chaplain in a building on Rikers Island where he’s ministered for the past 20 years.
“If you want to say something nice about me that would be good, I hope you will but I don’t think you will,” Frascone told the Herald. “There’s two ways of doing that – you could report detrimentally or you could report compassionate. That’s up to you and you answer to God for that.”
All of Frascone’s legal and financial problems have not stopped the Kathleen’s Tea Room project and the work continues.
“The mayor remains committed to the investment, restoring Kathleen’s Tea Room,” Joe Thompson said. “It’s a big undertaking to reconstruct the building after the loss that she suffered when it collapsed. And so she remains committed. It should turn out to be a really nice project when it’s all finished.”
