This tale of a sort of sting operation required participation from business, government, and a professional. John Nicolo was a real property appraiser who did appraisal work for Eastman Kodak, Inc. (Kodak) at the request of one of Kodak's now-former employees, Mark Camarata, who served as Kodak's director of state and local taxes while employed there. Charles Schwab was the former assessor for the town of Greece, New York, an area that included Kodak headquarters. Kodak is both the largest employer and the largest property owner in the town of Greece.

According to the indictments in the case, Schwab made reductions in Kodak's real property tax assessment. Those reductions, according to calculations completed by Nicolo and Camarata, saved Kodak \(\$ 31,527,168\) in property taxes over a 15 -year period. But Schwab did not make those reductions as a matter of assessor policy, fond feelings for Kodak, or the goodness of his public servant heart. He made those reductions at the behest of the other two in exchange for payment. Nicolo's fee from Kodak, arranged according to a percentage of the amount he was able to save the company, was to be \(\$ 7,881,798\) (about \(25 \%\) of Kodak's projected tax savings). After being paid over \(\$ 4,000,000\) of his fee from Kodak, Nicolo paid Camarata \$1,553,300 for his role in hiring him and then paid Schwab \(\$ 1,052,100\). The essence of the arrangement was that the appraiser agreed to split the tax savings fee with the assessor in exchange for the reduction and with the Kodak employee in exchange for hiring him.

The group also managed to involve companies that were buying property from Kodak. For example, in 2004, ITT bought one of Kodak's buildings in its industrial park as Kodak was downsizing. Immediately upon its acquisition of the building, ITT got an assessment from Schwab that quadrupled the value of the building for purposes of tax assessment. Mr. Camarata referred the ITT officers to Mr. Nicolo, who then talked Mr. Schwab into reducing the assessment value. However, unbeknownst to ITT, the whole scenario had been set up by the group, according to trial testimony. Schwab reduced the assessment value, and Nicolo split his fee with Camarata and Schwab.

Camarata entered a guilty plea to various federal fraud charges and agreed to cooperate with federal authorities in their prosecution of the other two of the property tax triumvirate, who were charged with 56 counts of fraud, money laundering, and other federal crimes. Mr. Camarata faced a possible penalty of 20 years, but was sentenced in 2009 to two years because of what U.S. Federal District Judge David Latimer described as follows: "Your cooperation with the government was immediate and complete. Without your testimony, I think the verdict might have been much more difficult for the government to accomplish ... your help was the linchpin for the government's case."

Mr. Camarata was ordered to pay \(\$ 10\) million in restitution as part of his federal prosecution, but the total amount he will owe remains unclear because of federal income taxes owed, civil damages to Kodak and ITT, and taxes owed to the city based on the undervaluations......................

Discussion Questions
1. Was anyone really hurt by this? Didn't Kodak benefit?
2. Why do we worry about an agreement by an assessor to reduce the assessed value? Couldn't he have done that anyway, regardless of receiving payment?
3. Does the method for paying appraisers on a contingency basis encourage this type of involvement by government officials?
4. Why do you think the three (possibly five) decided to engage in the scheme? Do any thoughts for your credo come from your observations about what happened?
5. After his guilty plea and agreement to cooperate, Mr. Camarata's fellow defendants referred to him as a "liar and thief." What lesson do you learn from this reaction and interaction?