Is not this a criminal action on the part of the society?
Not at all. There are many instances where plants continue operations while out of compliance with certain regulations. Government will often give you a choice: bring it into compliance or pay the fine. A frequent example is that of pollution-generating companies that choose to pay a fine for excessive contaminants from their smoke stacks instead of installing expensive filters. It's a simple cost-benefit analysis to determine the more cost-effective outcome for the proerty owner. The Society chooses to pay a fine for being out of compliance with their E Res building rather than removing the fifth floor, for obvious practical reasons. I don't know the exact amount... I believe I heard a number used like $40,000 or something, but of course this could be very innacurate.
Enforcement of local land use regulations is a patch-work system, where jurisdictions vary in their ability and willingness to enforce every component of their municipal code. One reason is that it's just too labor-intensive to keep tabs on every property in a city or county and then try to bring those properties into compliance. It's just not worth it for many jurisdictions, unless people start showing up at council meetings and complaining about it publicly. However, with the Wallkill complex being quite a high-profile operation in that neck of the woods, it wasn't a surprise that they were penalized for building a fifth floor without the permits for doing so.