Deal in works for state to recoup $650,000 on Rutland cleanup

Part of a foundation is visible at left on a property in Rutland where the state cleaned up chemical contamination in 2014. The tall building on the right is not part of the property. Photo by Alan J. Keays/VTDigger

RUTLAND — A settlement may be near in a long legal battle to force a local businessman to repay the state for the roughly $650,000 environmental cleanup it did of a property he owns in the city.

Assistant Attorney General Justin Kolber said Monday in the civil division of Rutland Superior Court that a mediation session earlier this year led to an agreement with John Ruggiero regarding the former Filippo Dry Cleaners site.

Judge Helen Toor. File photo by Hilary Niles/VTDigger
“We actually signed a settlement agreement,” Kolber, who attended Monday’s hearing via phone, told Judge Helen Toor. “The settlement was structured around Mr. Ruggiero selling several of his properties to pay the amount owed to the state for the cleanup cost.”

The settlement is not a done deal yet.

The agreement, Kolber told the judge, came with conditions that Ruggiero provide the state with “complete” financial disclosure information and other documents regarding his properties.

“We haven’t received anything. It’s now been over 2½ months,” the attorney said. “I suppose if we were to receive it in the next week or so and everything was in 100 percent order the state would still be amenable to the settlement.”

Ruggiero, representing himself Monday in court, agreed that he had been “less than diligent” in getting the documents to the state. He told the judge he wanted to make sure the paperwork was complete.

He asked the judge for two more weeks.

“I’d like to get this done properly, in an orderly fashion,” Ruggiero said, adding there’s a lot of money at play in the deal. “It’s not an insubstantial amount. I’d like to do it in a way that it’s not just a one-day liquidation sale.”

The exact terms of the settlement are not yet publicly available, Kolber said in an interview later Monday, because it won’t be finalized until Ruggiero provides the needed paperwork. Once that happens, the attorney said, the document would be filed in court and be public.

However, it is known that Ruggiero will be on the hook for the cleanup cost, which earlier reports had pegged at about $650,000. How much, if any, penalties Ruggiero will have to repay remains unknown.

Ruggiero walked by a reporter in the courtroom and declined to comment, saying only, “I know who you are.”

The state cleaned up the property at 84 Woodstock Ave. in 2014 after Ruggiero failed for several years to do it himself. Action needed to be taken, according to state officials, to stop migration of a plume of tetrachloroethylene, a dry cleaning solvent and known human carcinogen, toward a nearby residential neighborhood.

The cleanup, Kolber said in the interview Monday, took place before any of the contamination spread to the neighborhood or put anyone at risk.

The dry cleaning business, which started in the 1970s, remained in operation until 2001. Ruggiero, who owns and manages many properties in the city under a number of corporate names, later purchased the property at a tax sale in 2004 for $10. The state has been seeking to have him clean up the property almost ever since.

State officials believed the contamination was the result of decades of the dry cleaning business operating at the site.

Ruggiero has said in the past he didn’t have the money for the cleanup. A former lawyer, he went to jail in 2006 for mail fraud, and several of his properties are delinquent on taxes. As of last month, according to city records, he owed a total of $168,000 in back taxes to the city.

Also last month, Ruggiero was in the news when he, as part of a group of investors, agreed to purchase for $255,000 a property in Rutland that was once pictured on the front of The New York Times with a story about the ravages of heroin in Vermont.

Federal prosecutors wanted the previous owners to forfeit the home to the government. However, that process was dropped once the property was sold.

In court Monday, Judge Toor told the parties that if the settlement over the cleanup doesn’t pan out, she’ll schedule another hearing.

“Hopefully, you’ll get it all worked out,” Toor said at the close of the hearing. “If not, I will see you again.”

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Alan J. Keays

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