In a Manhattan federal courtroom on Tuesday, the longtime money man for the NYPD Sergeants Benevolent Association walked out with probation instead of a prison number. The veteran controller admitted he falsified company tax returns to hide payments linked to disgraced ex-union boss Ed Mullins, and the case has become the latest chapter in a years-long scandal that has rattled one of the city’s most powerful police unions.
Dennis Ostermann, 68, a former NYPD sergeant who served as the union’s controller and a partner at HB Consultants (HBC), pleaded guilty in June 2025 to aiding and assisting in the preparation of a false federal income tax return, according to the U.S. Attorney’s Office for the Southern District of New York. Prosecutors said Ostermann used HBC’s bank account in 2018 and 2019 to funnel $150,000 in payments to a third party on behalf of Mullins, then booked those disbursements on HBC’s tax returns as legal fees, trimming the company’s and its partners’ tax bill in the process. The plea was entered before a magistrate judge, and the case landed with U.S. District Judge Lorna G. Schofield.
On Tuesday, Judge Schofield sentenced Ostermann to two years of probation, ordered him to pay $35,052 in restitution and a $4,000 fine, and opted against sending him to prison, according to the New York Post. Prosecutors had pushed for a sentence of six months to a year behind bars, the Post reported, but the judge noted the union’s ongoing support for Ostermann during the hearing. The Post also reported that the Sergeants Benevolent Association cut Ostermann from its payroll the same day the sentence was handed down.
How prosecutors say the scheme worked
Federal filings describe what authorities cast as a straightforward bit of crooked bookkeeping. According to the U.S. Attorney’s Office for the Southern District of New York, Ostermann used HBC funds to pay a third party on Mullins’ behalf, then labeled the $150,000 in payouts as legal fees on the company’s tax returns. Those entries, prosecutors say, both disguised who really got the money and formed the backbone of the false-return charge to which Ostermann admitted guilt.
Background on Mullins' conviction
The payments at the center of Ostermann’s case tie back to the wider scandal around former SBA president Ed Mullins. Mullins pleaded guilty to embezzlement and was sentenced in 2023 to two years in federal prison, according to the Associated Press. That earlier case triggered FBI raids on union offices and raised pointed questions about how the SBA’s money was being spent and who was keeping watch over the books.
What the law says
The crime Ostermann admitted to - helping prepare a false and fraudulent U.S. income tax return - carries a statutory maximum of three years in prison. In practice, judges weigh factors like a defendant’s role, cooperation with investigators and ability to make restitution before deciding on punishment. The IRS Criminal Investigation unit said its agents led the financial probe that produced the evidence used in court, according to IRS Criminal Investigation.
In court, Ostermann told the judge, “I’ve always prided myself on doing the right thing” and said he expected this lapse “will be in my forethoughts for the rest of my life,” the New York Post reported. Between the no-jail sentence, the immediate removal from the union payroll and the long shadow of the Mullins scandal, scrutiny of SBA finances - and of how its leaders answer to rank-and-file sergeants - is unlikely to fade anytime soon.
