OLEAN — A city fire lieutenant has been charged with several felonies for allegedly writing $116,000 in unauthorized checks to himself.

The Office of the State Comptroller said Wednesday that Olean City Fire Department Lt. Terry Gaylor Jr., 41, was charged with second-degree grand larceny, a class C felony; two counts of second-degree forgery, a class D felony; and official misconduct, a class A misdemeanor, after allegedly writing city-funded checks to pay credit card bills or to himself directly.

“Gaylor betrayed his duty to his community by allegedly stealing funds meant to protect the citizens of Olean to fund his personal business and lifestyle,” Comptroller Tom DiNapoli said in a press release. “Now, thanks to my partnership with District Attorney (Lori) Rieman and the New York State Police, he will face the consequences for his actions.”

Gaylor, of Olean and a former trustee and current firefighter with the department, was arrested after a joint investigation by the comptroller’s office, the Cattaraugus County district attorney’s office and state police.

He allegedly used more than $50,000 of the funds to pay his personal credit card charges, DiNapoli said, most of which funded his private HVAC business, Amazon purchases and payments to Verizon Wireless.

Gaylor also allegedly wrote more than $65,000 in checks to himself from accounts, with many of the checks also having forged signatures. Gaylor allegedly deposited these checks into his personal account, which he then used to withdraw cash and pay for personal expenses.

The comptroller’s office said that the incidents occurred between September 2015 and April 2019, but that information on the number of checks could not be discussed due to pending litigation.

Gaylor was due back in court on Feb. 14.

Mayor Bill Aiello said Wednesday the funds involved in the case were not city government funds, and Gaylor is on unpaid administrative leave. The city was unaware of the investigation until the comptroller’s office issued its press release Wednesday, the mayor added, and was not asked to provide documents or other resources toward the probe.

“We have no oversight over this fund at all,” the mayor said, referring questions to union officials. “The fire department’s union has full control. ... No employee would have the ability to write checks out of city funds like this.”

Aiello identified the funds as coming from fire insurance funds collected by the state, which public relations staff of the state comptroller confirmed.

Under state law, insurance companies based out of the state that provide fire insurance on in-state properties must pay a tax equivalent to 2% of the premiums every year. The law requires 0.2% of the 2% go to the state firemen’s home in Hudson, while the remaining funds are disbursed to fire departments and fire districts across the state. The allocations are based on premiums collected in each department or district’s protection area.

The comptroller’s office, which requires an annual report to be filed by each agency receiving the funds, recommends keeping the funding separate from other funds in its own checking or savings account. An annual report must be filed with the state comptroller.

DiNapoli’s staff reported that as of early 2020 no such reports had been received from the city fire department, and it was unclear if any had been filed since.

According to the Firemen’s Association of the State of New York, departments may use the funds “for any purpose which the members of the fire department or company determine to be for the use and benefit of the department or company as a whole.”

According to previous determinations by the comptroller’s office, FASNY reports some of the acceptable uses include food and refreshments for firefighters, remodeling firehouse kitchens, buying radios or dress uniforms for firefighters, office equipment and furniture or developing a firemen’s park or training facility.

Examples of improper expenditures include direct cash payments to firefighters, general purposes or obligations typically covered by the government authority having jurisdiction over the department, compensation or loans to individuals, and training programs or convention attendance fees.

Local union officials could not be reached for comment Wednesday.

(Contact City Editor Bob Clark at bclark@oleantimesherald.com. Follow him on Twitter, @OTHBob)

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