A long-running wood work camp in the Catskills is facing new challenges, as the company that has operated it for more than 40 years faces a massive federal investigation.
The federal investigation into the Camp Randall-Woods camp comes after the Forest Service announced this month it had approved $2 million in federal aid to repair the camp’s water system and add more water to its water system.
The Forest Service has approved more than $3 million in grants to repair Camp Randall’s water and sanitation system and more than 3,000 residents who live in the camp are expected to receive an extension to the extension.
The camp’s management company, which operated the camp since 1884, filed for bankruptcy in June and has filed for Chapter 11 bankruptcy protection.
The company has a $9.7 million operating loan and a $1.8 million revolving loan, according to the federal court documents.
Federal prosecutors allege that the company was responsible for a $14 million shortfall in a federal grant to pay for the Camp Randolph-Wood’s water service.
Federal prosecutors said in court papers that the camp was responsible “for a significant and persistent deficit in water and sewage services” and that the $14.5 million in water, sewer and sanitary sewer debt is owed by the company, the American Forest, to other creditors.
The defendants have agreed to pay $2.9 million of the debt, which includes a $7.4 million installment loan, $1 million of which is secured by the camp and the rest is due to a loan the defendants have secured for $2,500 each, prosecutors said.
The Justice Department said it is reviewing the court filings and will decide whether to bring criminal charges in the coming weeks.
The lawsuit filed in federal court says the defendants’ conduct violates federal law, the Fair Labor Standards Act and federal regulations that govern the operation of federally-owned facilities.
The Forest Service said it was not aware of the lawsuit and declined to comment.