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Owner of Brooklyn Hardware Store Hid Tens of Millions of Dollars, Son Says

 Sidney Kronenberg (left) was a Brooklyn hardware store owner who was busted in a widespread public corruption scandal in the 1980s. His son believes he his more than $10 million under aliases and offshore accounts before he died.
Sidney Kronenberg (left) was a Brooklyn hardware store owner who was busted in a widespread public corruption scandal in the 1980s. His son believes he his more than $10 million under aliases and offshore accounts before he died.
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Courtesy of Ruthayn Sgaglio

NEW YORK CITY — The owner of a Brooklyn hardware business who was prosecuted by Rudy Giuliani for a role in a massive city corruption scandal in the 1980s was so diabolical that he hid tens of millions of dollars before his death, his son claims.

Sidney Kronenberg, who owned an East Williamsburg hardware business called Brown Industries Inc., died in 2010 with about $8 million that has been accounted for, according to court records. But his son, S. Harris Kronenberg, says there is much more money out there hidden in offshore accounts and under aliases — and he bases his belief on his dad’s criminal past.

“[Sidney Kronenberg] was a convicted felon who continued to be involved in various financial transactions and schemes, used aliases or Social Security numbers other than his own in order to transfer assets and open new accounts. In his name and in the name of others,” Harris wrote in a court filing last year.

 Sidney Kronenberg poses with his bride on his honeymoon. Kronenberg owned a Brooklyn hardware store and was caught up in a public corruption scandal involving the city Housing Authority in the 1980s. His son believes he hid millions of dollars before he died.
Sidney Kronenberg poses with his bride on his honeymoon. Kronenberg owned a Brooklyn hardware store and was caught up in a public corruption scandal involving the city Housing Authority in the 1980s. His son believes he hid millions of dollars before he died.
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Courtesy of Ruthayn Sgaglio

Two years ago, Harris Kronenberg went to Westchester Surrogate’s Court to get a judge to allow him to take over administration of his dad’s estate from his uncle so he could hunt for the alleged hidden cash. A judge signed off on the request in November 2013.

Since then Harris has gone to court to compel financial institutions, as well as his sister, to hand over information that might point to the whereabouts of the money.

Last year, he got a judge to force Morgan Stanley to hand over records related to accounts his dad held. He also demanded his sister, Ruthayn Sgaglio, hand any information on stocks, bonds and accounts that she took from her father’s home in Bedford, N.Y., after his death.

Harris Kronenberg, 48, declined to discuss the case, but a source said so far his search hasn’t led to the discovery of new assets.

Sgaglio, 51, of the Upper East Side, told DNAinfo New York that she didn’t have any information to offer her brother, but she has no problem with him searching for money.

“If something comes up, sure, I’d be really happy,” she said.

Kronenberg was busted in 1985 as part of a kickback scheme in which Housing Authority supervisors took bribes from suppliers. Giuliani, then a federal prosecutor, oversaw the case, which led to the arrests of more than a dozen city workers.

Two Housing Authority workers cooperating with investigators into the scandal were also shot, execution-style. One survived, but other, Staten Island resident Stanley Gardiner, died from his wounds. His murder was never solved, according to a New York Times report.   

Kronenberg was convicted for a minor role in the bribery scheme but never served prison time.

Sgaglio said her dad “worked like an animal seven days a week” and was a savvy businessman. But she said she wouldn’t be surprised if he hid assets — especially from her and her brother.

She described her dad as a tortured soul and a lousy parent who went off the deep end after their mother died when she and her brother were in their teens.

“Animals treat their young better than my father treated us,” said Sgaglio, who left their Queens home shortly after her mother’s death. 

As proof, she said, look no further than her dad’s will. In it, he disavowed her.

“My daughter, Ruthayn, and I have not been on good terms for many years,” he wrote in the will. “It is my intention that she not receive a ‘wooden nickel’ from my estate.”

Sgaglio, who works as a court reporter, said her dad initially wanted the language of his will to read more cruelly.  

“The original will said he did not want me to receive ‘the sweat off my b---s,’” she said, but added that his lawyer refused to use the phrase.

The will also stated that her brother, who was on somewhat better terms with her dad, receive $500 a week for the rest of his life — with any remaining funds going to the animal care nonprofit Bideawee.

After her father died, she waged a legal fight to gain a piece of the $8 million accounted for in his estate. And in a highly unusual move, she and her lawyer, Jeffrey Stark, enlisted the services of Dr. Michael Stone, a celebrated Columbia University psychiatrist who has written a number of books on evil, to diagnose her dad from beyond the grave.

She said she and Stark interviewed and deposed about a dozen people who knew her father throughout his life, including his brother, his lawyers and friends.

“There was not one person who said, ‘You know what a great guy he was,’” she said.

Stone read the interviews and gave her dad a diagnosis similar to narcissistic personality disorder, Sgaglio said.

Armed with the diagnosis, her lawyer negotiated a settlement over the estate with all the interested parties, records show. 

Under the agreement, Bideawee received a $2.5 million bequest and her uncle and Paul Kronenberg got $1 million. She and her brother divvied up the remaining cash, with her getting 31.25 percent and her brother receiving 68.75 percent, according to court filings.

Sgaglio said she hasn’t seen any concrete evidence that her dad had more money hidden away, but she’s keeping an open mind.

“I would love for it to be true, but I think right now, like I said, I don’t see anything that has legs to it,” she said. “It seems like a lot of obstacles in the way.”