A former claims manager for the New Jersey Turnpike Authority, Gerardo Blasi, pleaded guilty to an insurance scheme that stole at least $1.5 million from the authority and a number of insurance companies. From 2009 to 2013, it was Blasi’s job to recover the cost of repairs from the insurance companies of motorists who caused damage to turnpike property. Working with representatives from two insurance companies, Blasi inflated the cost of repairs and split the extra money between himself and his conspirators, according to the feds. Even thought it is authority policy not to recover damages caused by motorists who die from accidents on the turnpike, Blasi continued to process those claims and shared all of that money with his conspirators, the feds said.
U.S. Attorney Paul Fishman, Dec. 11, 2013
- A state Grand Jury has indicted a former member of the Elizabeth Board of Education, a board attorney and the board’s outside counsel. The three are charged with covering up a false application filed by the board member’s wife for a federally funded free lunch program. Indicted were former board member Juan Donoso, board attorney Kirk Nelson and outside counsel Frank Capece. “We allege that these defendants corruptly used their authority within the school district to try to sweep this matter under the rug,” said Acting Attorney General John Hoffman. Investigators allege that at Donoso’s request, Nelson and Capece obstructed a state investigation by covering up a false application filed by Donoso’s wife, Olga Oviedo-Arevalo. She was charged in April with filing false applications and has entered a pre-trial intervention program. The state’s investigation first began with the arrest of Marie Munn, president of the Elizabeth Board of Education, who was charged with lying to get federally funded free lunches for her two children. Munn has resigned and is awaiting trial. The sad part is that Elizabeth is not alone. State Comptroller Matthew Boxer has referred 83 public employees for prosecution, saying they lied about their income to get their kids into the free school lunch program. In addition to the 83, Boxer said he found 26 family members of public employees who gave false information to get the free food. The Boxer investigation of 15 school districts concluded that there was widespread fraud in the National School Lunch Program in New Jersey.
Acting Attorney General John Hoffman, Dec. 9, 2013; Comptroller Matthew Boxer, July 17, 2013
- Former Sen. Joe Coniglio, a plumber convicted of extortion for steering millions of dollars to the Hackensack University Medical Center in exchange for a $5,000-a-month consulting fee, is being sued by the Election Law Enforcement Commission for using campaign funds to pay his defense lawyer. “Elected officials and their treasurers must abide by the law in managing their campaign accounts,” said Jeff Brindle, ELEC’s executive director. “Candidates are not permitted to use campaign funds to defend themselves in a criminal matter.” Coniglio was released from prison in 2011 after serving 16 months. His 30-month sentenced was reduced to 20 months after fraud charges were tossed, based on a U.S. Supreme Court ruling that affected a number of corruption cases in New Jersey. But the charge of extortion held, and Coniglio finished out his reduced sentence at home with electronic monitoring.
Christopher Baxter, Star-Ledger, Dec. 6, 2013; Associated Press, March 25, 2011
- A West Orange gastroenterologist has become the fourteenth defendant and thirteenth doctor convicted in a kickback scheme that paid cash to doctors who referred patients for medical tests. John Green, 60 of Basking Ridge, pleaded guilty to receiving more than $14,000 in kickbacks for patient referrals. The feds said Green agreed to take cash from Orange Community MRI in exchange for MRIs and CAT scans. He admitted receiving cash for each patient for three years. On two occasions, Green received an envelope with more than $800 in cash from an Orange MRI representative, the feds said.
U.S. Attorney Paul Fishman, Dec. 5, 2013
- Since colonial times, New Jersey has been famous for its scams. A federal jury convicted Giovanni Arena for a scam that keeps the state’s reputation intact. It took the jury less than four hours to come to its conclusion after the week long trial. Arena defrauded an investor out of $1.2 million, which he said would be invested in a South Jersey pizza place. Instead, he laundered the money, using it to buy a Maserati coupe and a Chevy Camaro and to gamble at Atlantic City casinos. The jury saw casino records that showed Arena lost more than $700,000 gambling and saw a video of him using $81,000 in cash at a black jack table. Arena also failed to report hundreds of thousands of dollars in income to the IRS. As if that wasn’t enough, he threatened the victim investor and told the investor to lie to federal investigators. According to the feds, Arena said, “You better not put me in trouble because if you put me in trouble, I’ll put you in trouble.” Arena was convicted on charges of mail fraud, money laundering, failure to file income tax returns and tampering with a witness.
U.S. Attorney Paul Fishman, Nov. 27, 2013
- This time, the feds said the bribe was $8,000, plus a power wash for a home. (As we have always said, you can’t make this stuff up.) Former NJ Transit supervisor, Donna Schiereck, who worked for the agency for more than 20 years, has been charged with agreeing to accept an $8,000 bribe in return for arranging an NJ Transit snow removal contract for a Lakewood company (which also power washed homes). Federal prosecutors said they recorded a telephone call in which Schiereck told an undercover operative that she was owed $8,000, plus the powerwash, since the contract has been arranged.
U.S. Attorney Paul Fishman, Nov. 21, 2013; Dan Radel, Asbury Park Press, Nov. 22, 2013
- U.S. District Judge Jose Linares sentenced a prominent cardiologist, Jose Katz, to six years and six months in prison and ordered Katz to pay $19 million in restitution for a scheme that sent thousands of patients for unnecessary and potentially life-threatening tests and treatments. Katz also was sentenced for his role in treatment given to patients by an unlicensed doctor. The $19 million in bogus billings was the largest amount suffered by victims in New Jersey, New York and Connecticut for a single doctor convicted of health fraud, the feds said. “Prison is an appropriate consequence for ripping off the government and insurance companies through the shocking exposure of patients to unneeded or untrained treatment,” said U.S. Attorney Paul Fishman. Prosecutors said Katz falsified patient charts and falsely diagnosed patients to justify unnecessary treatment. According to the feds, he ordered and performed the same battery of diagnostic tests for nearly all the patients he treated, no matter what their symptoms.
U.S. Attorney Paul Fishman, Nov. 20, 2013
- Richard Greer, the owner of a company that sold maintenance and cleaning supplies, pleaded guilty to paying $500 a month to a Union County official in return for $120,000 to $200,000 in payments through fictitious invoices. The arrangement was made with Aniello Palmieri, the director of the Division of Facilities Management for Union County. The feds said Greer wasn’t the only vendor Palmiere was working with. Palmieri and Frank Donald Vicendes III, another Union County supplier, admitted to a similar bribery scheme that defrauded the county out of another $120,000.
U.S. Attorney Paul Fishman, Nov. 20, 2013
- A former unemployment insurance clerk with the State Department of Labor pleaded guilty to stealing $18,825 in unemployment benefits by using her State Department computer to divert money from unemployment claim accounts into her own personal bank account. Patricia Garcia, under the plea agreement, is likely to spend one day less than a year in county jail and will be barred from public employment in New Jersey. Garcia diverted money from four different unemployment benefit accounts into her own account. Three of the four unemployment benefit accounts should have been discontinued. The other claim was filed by Garcia in the name of someone who had been collecting disability insurance.
NJ Acting Attorney General John Hoffman, Nov. 18, 2013
- Two stars of the Bravo reality TV series “The Real Housewives of New Jersey” were indicted on additional charges of bank and loan application fraud. Teresa Giudice and her husband Giuseppe “Joe” Giudice of Towaco each had two additional charges added to the existing 39 counts from a previous indictment, bringing the total to 41 counts for each. The new charges stem from a $361,250 mortgage loan that Teresa obtained in 2005. She and Giuseppe prepared a loan application that said she was employed as a realtor and had a monthly salary of $15,000, according to prosecutors. The feds said Teresa wasn’t working outside the home at the time. This is serious business. The bank fraud and loan application fraud charges each carry a maximum potential penalty of 30 years in prison and a $1 million fine, according to prosecutors.
U.S. Attorney Paul Fishman, Nov. 18, 2013
- In New Jersey, you may have noticed, some of the juiciest stories revolve around a diner. This one is no exception. A state grand jury indicted Georgios Spyropoulos, manager of the Tick Tock Diner in Clifton, and charged him with hiring a hit man to kill his uncle by marriage, Alexandro Sgourdos, who co-owned that diner and the Tick Tock diner in Manhattan. We already knew about the arrest. But now we add the detail of torture. According to prosecutors, Spyropoulos not only asked the hit man to kill his uncle, but to torture him first, if necessary, to obtain the combination to the safe at the Manhattan diner. As is often the case, the problem was, the hit man was an undercover detective and their conversation was secretly recorded. Spyropoulos is charged with conspiracy to commit murder, attempted murder and attempted robbery. According to prosecutors, the hit man was told to obtain the combination to the safe at the Manhattan diner, kill the uncle, dispose of the body and then pose as an exterminator to gain access to the diner and the safe. All that work for $20,000. Spyropoulos will plead not guilty, according to his lawyer.
Christopher Baxter, Star-Ledger, Nov. 6, 2013; Samantha Henry, Associated Press, April 10, 2013; Associated Press, April 12, 2013
- The Star-Ledger called it a bizarre plot more like a scene out of The Sopranos than a scene from an ultra-Orthodox Jewish culture. Rabbi Mendel Epstein, of Lakewood and Brooklyn, and Rabbi Martin Wolmark, a school administrator at a yeshiva in Monsey, New York, were arrested in New Jersey along with eight others and charged in connection with a kidnapping and torture scheme in which wives paid a kidnap team to convince husbands to provide the “get” needed for an ultra-Orthodox Jewish woman to divorce her husband. Federal prosecutor R. Joseph Gribko said, “They beat them up, tied them up, shocked them with Tasers and stun guns until they got what they want.” The cost: $10,000 for the rabbinical decree permitting violence and $50,000 for the team to carry out the order. In a secretly recorded conversation, an undercover investigator, posing as a wife, was told, “We take an electric cattle prod. If it can get a bull that weighs five tons to move…You put it in certain parts of his body and in one minute the guy will know…” The FBI said most of those charged were arrested at a Middlesex County warehouse where they gathered to nab a victim. The kidnap team arrived in two minivans and put on Halloween masks, ski masks and bandannas and carried rope, flashlights, surgical blades, a screwdriver and plastic bags, prosecutors said.
Ted Sherman and Salvador Rizzo, Star-Ledger, Oct. 11, 2013; Joseph Goldstein and Michael Schwirtz, New York Times, Oct. 10, 2013
- The saga of kickbacks paid to doctors for ordering up medical tests goes on and on. It is an outrageous story of medical personnel trading their patients for money. Padma Siripurapu, a Somerset County doctor who once served as clinical director at Newark Community Health Center, pleaded guilty and was sentenced to six months in prison and five months home confinement for kickbacks paid for referring her patients for diagnostic tests. According to the feds, she agreed with Orange Community MRI that the firm would pay her a set amount for every MRI, CAT scan, ultrasound, echocardiogram and bone scan she referred. Between 2009 and 2011, she referred patients for more than 1,000 tests and was paid $50,000 in kickbacks, prosecutors said. Siripurapu is the twelfth person in the fed’s probe of Orange MRI to plead guilty. A jury convicted a thirteenth defendant, pediatrician Chikezie Onyenso, of taking the kickbacks for test referrals.
U.S. Attorney Paul Fishman, Oct. 24, 2013
- While researching The Soprano State, we found that New Jersey scams go way back to colonial times. (You can check it out at the museum at Valley Forge.) In a recent scam, Aref Abuhadba of Totowa was sentenced to a year and a day in prison for selling counterfeit Nike sneakers and Walt-Disney-brand blankets smuggled in from China. Abuhadba received up to $42,000 for each smuggled container imported into the United States, the feds said. One container seized by customs in Long Beach, California, contained more than 10,000 pairs of counterfeit Nike Air Force One sneakers. Retail value: $1.5 million, prosecutors said.
U.S. Attorney Paul Fishman, Oct. 22, 2013
- Mahwah resident Sara Rong Liu was arrested and charged with fraud schemes that the feds said raked in more than $10 million from investors in the U.S. and China. According to the feds, Liu, president of Westone Inc., a textile firm that manufactures bed sheets, window treatments and table linens, convinced victims that Westone had been awarded a $156 million contract by New York City and that she was about to inherit $17 million from a deceased uncle. She solicited funds and promised to pay back the money after the New York contract money and the inheritance arrived, prosecutors said. The feds said both were bogus. If convicted, Liu faces up to 20 years in prison.
U.S. Attorney Paul Fishman, Oct. 24, 2013
- NewJersey.Watchdog.org has done another investigation on pensions that will make your head hurt. New Jersey has 21 county sheriffs. Of those 21, 17 (all but four) are collecting both a salary for their present job and a pension for another public job that they have retired from. Eight of the sheriffs earn more than $200,000 a year in both salary and pension payments. The top payment goes to Michael Saudino of Bergen County who is paid $138,000 in salary and $129,984 in pension payments, for a total of $267,984, the Watchdog revealed. Undersheriffs are doing the same, meaning a total of 46 sheriffs and undersheriffs are double dipping at a cost of $8.3 million a year, $3.4 million in retirement pay plus $4.9 million in salaries. State law allows the double dipping for law enforcement officials. Officers retire from one public job after securing a pension, and then move to another public job. Once again, legislation to correct the double payments is stalled in the New Jersey Legislature. A bill that would suspend the collection of a state pension, if someone takes a public job that pays more than $15,000 a year, was introduced in 2011 and has gone nowhere.
NewJersey.Watchdog.org, Mark Lagerkvist, Oct. 24, 2013
- Former Assemblyman Al Coutinho was sentenced to three years probation. He could have gotten up to six and half years in jail. Coutinho pleaded guilty to stealing $32,500 from his family’s charitable foundation and to failing to disclose the income on his legislative financial disclosure forms. Prosecutors said between 2008 and 2012, Coutinho cashed checks, dipping into donations to the foundation, and used the money for himself. The Bernardino Coutinho Foundation, a nonprofit charitable organization run by the Coutinho family, was best known for its Portuguese Day Festival. Coutinho, a Democratic lawmaker from Essex County, is permanently barred from holding public office and from public employment in New Jersey. He must repay the $32,500. But the sentence raises questions. As Bob Ingle noted, some are asking whether there is one set of rules for public officials and another set of rules for the rest of us.
Christopher Baxter, Star-Ledger, Oct. 24, 2013; Bob Ingle, Asbury Park Press, Sept. 13, 2013
- Whoever thought that we would be hearing again about Charles Kushner and cameras? Only in New Jersey. A jury will be allowed to decide whether cameras hidden in bathrooms in a commercial building owned by Kushner Companies (whose principal is Kushner) violated employees’ right to privacy. Sixty employees and their children have filed a lawsuit saying their right to privacy was violated by the cameras which were hidden in safety devices such as smoke detectors. The company said the cameras were installed to stop vandalism, were only used for three days and were aimed only at sinks. Lawyers for the employees said the cameras also were pointed on the exterior of stalls and urinals. (Kushner can be found in several locations in The Soprano State. He was charged with witness tampering, obstruction of justice and promoting prostitution. Under a plea agreement, he was sentenced to two years in a federal prison camp. According to prosecutors, Kushner was under investigation by the feds and in an attempt to convince family members not to cooperate with the investigation, he hired a prostitute to engage in videotaped sex with his brother-in-law and then sent the tape to his sister.)
Richard Cowen, The Record, Oct. 18, 2013
- The Genovese crime family is still alive and well in New Jersey. They are using more modern methods for illegal gambling, but still doing debt collection the old way, the feds said. John “Fu” Breheney, identified by the feds as an associate of the Genovese mob family, pleaded guilty to racketeering, including illegal gambling, theft of cargo, collection of unlawful debt, and tax evasion. He agreed to forfeit $400,000 in profits from the illegal activity. According to the feds, Breheney worked with a Genovese capo and crew as an electronic bookie who used an offshore Web site to track bets. Bettors used the Web site to place bets on sporting events. Losses were converted to debts, which were collected by extortion, including threats that the bookies had the backing of the Genovese family. Breheney was arrested in 2012 along with 11 other members or associates of the Genovese mob also charged with racketeering activities.
U.S. Attorney Paul Fishman, Oct. 17, 2013
- A Hudson County contractor got his money’s worth for his bribe. Joseph Arrigo of Bayonne pleaded guilty to paying a bribe of $65,000 to a Bayonne official in exchange for the official’s assistance in awarding $426,000 in federal grants to Arrigo. The federal grants were for the rehabilitation and repair of homes of low-income families and were paid to Arrigo as the owner of Shadow Contracting. Arrigo also pleaded guilty to filing a false tax return. The feds said he under reported his income in 2011 by $151,993.
U.S. Attorney Paul Fishman, Oct. 17, 2013
- Essex County Executive Joe DiVincenzo, a Democrat aligned with Republican Gov. Christie, didn’t make The Soprano State. But maybe he should have. The Election Law Enforcement Commission has accused DiVincenzo of illegally spending $16,548 in campaign funds and of failing to disclose $71,810 in campaign spending. ELEC charges that he wrongfully spent campaign funds in ways that would have qualified him for The Soprano State: $9,000 for airfare, hotels and food for two trips to Puerto Rico, $676 for a tuxedo and $75 for a tuxedo vest, $97 a month for a gym membership and more than $100 in parking tickets. Even though he has not had a serious challenger in more than a decade, DiVincenzo’s campaign fund boasts more than $900,000. His longtime adversary, Democratic Sen. Dick Codey called the spending “disgusting.” Angelo Genova, the high-powered lawyer (who did make The Soprano State) representing DiVincenzo, said the campaign fund has been reimbursed for some of the spending, even though the campaign believed the spending was legal.
Matt Friedman, Star-Ledger, Oct. 3, 2013
- Associated Press CEO Tom Curley said you would be pounding the table for reform after reading The Soprano State. This is an example. New Jersey Watchdog.org found that 18 state employees, who get disability pay from the police and fire pension funds, have been working for the state and double dipping at a cost of $2.2 million each year, $1 million in tax-free accidental disability pay, plus $1.2 million in salaries. Adam Heck, an associate counsel on the governor’s staff, earns a salary of $110,000 at the same time he collects a police disability pension of $44,000 a year. The top double dipper is Scott Jenkins, who gets $93,000 in police disability pay and $93,000 in salary as a chief investigator in the state Division of Consumer Affairs. Legislative bills in both the Senate and Assembly would end the special double dipping for police and firefighters. Both bills are stalled.
Mark Lagerkvist, watchdog.org, Sept. 9, 2013
- Two more doctors and a salesman pleaded guilty in a scheme that had physicians ordering up lab tests in return for bribes. Angelo Calabrese, a doctor with an office in North Arlington, admitted accepting more than $130,000 in bribes for referring $600,000 in lab work to Biodiagnostic Laboratory Services of Parsippany. Paul Ostergaard of Pompton Plains pleaded guilty to accepting more than $50,000 in bribes to refer $150,000 in lab work. David McCann of Lyndhurst admitted paying thousands of dollars in cash to doctors on behalf of Biodiagnostic Laboratory Services. To date, 17 people (11 employees associated with BLS and six doctors) have pleaded guilty in the scheme, which involved the payment of millions of dollars in bribes and more than $100 million in payments to the laboratory from Medicare and insurance companies. “Offering slush fund payments for medical referrals, ultimately paid for by taxpayers, can have absolutely no place in our health care system,” said Thomas O’Donnell, special agent with the Health and Human Services Office of the Inspector General.
U.S. Attorney Paul Fishman, Sept. 11, 2013
- Comptroller Matthew Boxer found more than $300,000 in overcharges and questionable billings for the hauling of hurricane Sandy debris from nine Ocean County communities to a local landfill. Boxer said he did not find persuasive evidence that it was intentional. The comptroller cited the absence of specific standards for calculating debris transport mileage and other vague language in the removal contract. The debris hauler was AshBritt, Inc., of Florida. Three companies, called monitors, calculated the transport mileage for the invoices: Arcadis U.S., Louis Berger Group, and Witt O’Briens. (The mileage calculation was key because the cost jumped 30 percent after 16 miles.) According to the comptroller, Arcadis gave AshBrit credit for an additional .6 miles of driving inside the landfill, which pushed many trips over the 16-mile threshold. AshBritt has agreed to repay the more than $300,000 in charges questioned by the comptroller. The Christie Administration gave the emergency contract to the company without competitive bidding in an effort to speed cleanup of the mess left by the storm. Critics question the move because the company was recommended by former Republican Mississippi Gov. Haley Barbour, a partner in the lobbying firm that represents AshBritt. The Office of Inspector General with the Department of Homeland Security is reviewing the awarding of the contract.
Comptroller Matthew Boxer, Sept. 10, 2013; Shawn Boburg, The Record, Sept. 10, 2013; Jarrett Renshaw, Star-Ledger, Sept. 10, 2013, Sept. 11, 2013
- Another high ranking for New Jersey not to be proud of, according to a review of hate groups by the Express-Times of Easton, Pa. The Southern Poverty Law Center says New Jersey is home to 51 hate groups, the fifth highest among the fifty states. Two groups have chapters in Hunterdon County: the Aryan Terror Brigade in Flemington and the National Socialist Movement in Holland Township. Two members of the Aryan Terror Brigade recently were sentenced in connection with a bias attack in Sayerville. One was sentenced to 33 months in prison, the other to 15 months. Flemington native and self-proclaimed white separatist Joshua Steever founded the neo-Nazi group, according to One People’s Project, a Philadelphia-based organization that tracks hate groups. Pennsylvania has 35 active groups, 16 fewer than New Jersey, according to the Southern Poverty Law Center.
Matthew Bultman, Express-Times, Aug. 25, 2013; U.S. Attorney Paul Fishman, Aug. 7, 2013
- Last year, the New York Post pointed out that 16 New Jersey mayors had been arrested by the feds over the past seven years. The sixteenth was West New York Mayor Felix Roque, accused with his son of conspiring to hack into a Web site aimed at recalling the mayor. In the hallway of a federal courthouse, 40 supporters cheered after the Hudson County mayor was acquitted. His son was not so lucky. On a charge reduced to a misdemeanor, Joseph Roque was found guilty of hacking the Web site. The son, who wants to be a lawyer, never denied accessing the e-mail and passwords of the political opponent to the mayor, Hudson County Freeholder Jose Munoz, who was anonymously running the Web site. Joseph Roque never denied disabling the Web site and deleting its contents. Both the mayor and his son said the mayor did not know about his son’s hacking. The hacking case is a snapshot of infamous Hudson County politics. It is interesting to note that Felix Roque was elected in 2012 as a reformer in a city and county known for its corruption.
Jason Grant, Star-Ledger, Oct. 2, 2013; Michaelangelo Conte, Jersey Journal, Oct. 1, 2013; Annie Karni, New York Post, June 24, 20123
- A Burlington City man found an unusual way to pressure New Jersey politicians into action. Harry Heck first went to city council to complain that officials weren’t doing enough to keep a town resident from feeding feral cats. Then Heck put food in city council members’ yards to lure the feral cats there. As a result, he ended up pleading guilty to a charge of littering and was ordered to pay a $250 fine. However, city council is now considering a plan to control the cats. You should know that Heck was once named citizen of the year in Burlington City.
Associated Press, Sept. 24, 2013
- Paul Bergrin, a former federal prosecutor and former high-profile defense lawyer who represented the likes of New Jersey mobster Angelo Prisco, has been sentenced to six life sentences. In March, a jury convicted Bergrin of conspiracy to murder a witness and of racketeering, drug trafficking, prostitution and bribery. The trial lasted eight weeks, and it took the jury two days to deliver a verdict. Prosecutors said Bergrin plotted the murders of witnesses who could testify against his clients. Bergrin was found guilty of orchestrating the murder of an undercover FBI informant who would have testified against a client of Bergrin’s accused of drug dealing. The FBI informant was shot in the head in Newark. The admitted gunman told the jury that Bergrin visited the client’s gang and told them that without the informant, there would be no case against the client.
U.S. Attorney Paul Fishman, Sept. 23, 2013; Jason Grant, Star-Ledger, Sept. 23, 2013
- Salem County Freeholder Robert Vanderslice violated state ethics rules in 2012 when he cast two votes that favored the bank where he was CEO, the Local Finance Board has ruled. Vanderslice, a Republican running for a seat in the state Assembly, was fined $100. In January 2012, Vanderslice seconded a motion and then voted in favor of making the Pennsville National Bank (where he was CEO), the depository for Salem County money. He then seconded a motion and voted to name Donald Masten (president of the bank’s holding company) special counsel for Salem County. When conflict of interest questions were raised about the appointment of Masten, another vote was taken. Vanderslice abstained and the appointment vote failed. Vanderslice said that the county solicitor should have advised him that the votes were a conflict-of-interest. Vanderslice has requested a hearing in the case.
Alex Young, South Jersey Times, Sept. 12, 2013; Local Finance Board, Oct. 3, 2013
- Rahway Mayor Rick Proctor was only in office 32 months. But it was quite a ride. A year after the former Union County freeholder and longtime chairman of the Rahway Democratic Committee became mayor in 2011, the committee was hit with one of the largest fines ever issued by the state Election Law Enforcement Commission ($68,750) for failing to report its contributions in 2006. The Democratic chairman replacing Proctor, Samson Steinman, said Proctor was forced out of the chairman’s post because of his handling of the ELEC complaint. But that wasn’t the end of Proctor’s woes related to the ELEC fine. In March of this year, he was fined $750 after being found guilty in municipal court of violating a Rahway ordinance that prohibits city officials from soliciting campaign contributions on city property. After a meeting in city hall, Proctor (in a city hall parking lot) asked a representative of Birdsall Services Group for a donation to help pay the ELEC fine, according to the complaint. (Ironically, the now bankrupt Birdsall firm was fined $1 million dollars for violating the state’s pay-to-play laws.) But there is more to the Proctor story. Last year, the Local Finance Board fined him $500 after finding him guilty of an ethics violation. The complaint, filed with the Local Finance Board, accuses Proctor of pressuring Rahway’s business administrator to hire his wife, Denise Proctor, as Rahway’s health officer (a post Proctor held before becoming mayor) and to give her a six-figure salary. Proctor has appealed the fine, which is the largest that could be levied under current state law. Also, Rahway city council (all Democrats) passed an ordinance prohibiting the hiring of elected officials’ family members. After Proctor vetoed the ordinance, the council unanimously overrode the veto. The council then reduced the mayor’s salary from $65,000 to $20,809. Proctor, who won election with 62 percent of the vote, put his house up for sale before resigning. (State Comptroller Matthew Boxer wants to move the maximum fine for ethics violations by local officials from $500 to $10,000, but the New Jersey Legislature has failed to act on it. Only in the Soprano State.)
Richard Khavkine, Star-Ledger, Sept. 11, 2013; Tom Haydon, Star-Ledger, March 4, 2013; Ryan Hutchins, Star-Ledger, June 3, 2012; Ryan Hutchins, Star-Ledger, Jan. 29, 2012; Editorial, Courier-News, Feb. 4, 2013
- Former Middlesex County Sheriff Joseph Spicuzzo was sentenced to nine years in prison for a jobs-for-cash scheme. Spicuzzo, Middlesex County’s sheriff for 30 years and Middlesex County’s Democratic Party chief for 16 years, collected $112,000 in bribes from those seeking positions or promotions in the sheriff’s office, state prosecutors said. “Sheriff Spicuzzo’s decades as a political power broker in Middlesex County corrupted him to the point that he viewed jobs in the sheriff’s office as personal assets he could sell for his own enrichment,” said Acting Attorney General John Hoffman. Prosecutors said that between 1996 and 2008, Spicuzzo demanded that eight people pay him bribes in return for him appointing them as investigators or promoting them. Investigators said he directly or indirectly solicited and accepted bribes of between $5,000 and $25,000 from seven people. When he was arrested, Spicuzzo resigned as party chief and from his position as a commissioner on the New Jersey Sports & Exposition Authority. The Attorney General’s Office has set up a toll-free corruption tipline: 1-866-TIPS-4CJ, or those with tips can use the Web page www.njdcj.org. The attorney general promises confidentiality.
Attorney General John Hoffman, Sept. 20, 2013
- New Jersey now has two lawmakers on a watchdog group’s list of the nation’s 13 most corrupt members of Congress. Sen. Robert Menendez joins U.S. Rep. Rob Andrews on the 2013 list issued by Citizens for Responsibility and Ethics in Washington (CREW). Both lawmakers are under investigation, according to published reports. Both say they did nothing wrong. Menendez has been in the news for his close personal relationship with Florida ophthalmologist Salomon Melgen. The wealthy campaign donor to Menendez gave the senator two flights to the Dominican Republic on his private plane, trips that Menedez said he mistakenly failed to disclose. He reimbursed Melgen’s company $58,500 for the cost of the two trips. But the more serious allegations swirling around Menendez center on whether or not he did inappropriate lobbying for the campaign contributor, who has been accused of overbilling Medicare and who has had problems with a port security contract in the Dominican Republic. Andrews was already on the CREW list after reports that he used campaign funds to pay for a trip to Scotland for himself and his family.
Matt Friedman, Star-Ledger, Sept. 18, 2013; CREW, Sept. 18, 2013; Bob Ingle, Sept. 19, 2013
- They still wanna live in New Jersey. Lisa Marie Scarfo, the wife of reputed mobster Nicodemo S. Scarfo (and daughter-in-law to the jailed mob figure Nicodemo “Little Nicky” Scarfo), pleaded guilty in federal court to conspiring to defraud a bank so she could buy a $715,000 house in Egg Harbor Township. In 2011, Lisa Marie Scarfo and 12 others, including her husband, an alleged member of the Lucchese crime family, were charged with racketeering conspiracy. The feds charged the group with extortion and other crimes in connection with the takeover of a Texas financial services company. According to the charges, Nicodemo S. Scarfo used money looted from the Texas firm for a $215,000 down payment on the home. Lisa Marie admitted that in 2008, when she was engaged to marry Scarfo, she used false tax returns, which exaggerated her income, to qualify for a $500,000 mortgage without using Scarfo’s name to obtain the mortgage. (In The Soprano State you will learn how “Little Nicky,” now Lisa Marie’s father-in-law, in the old days wasn’t about to lose Atlantic City to the New York mob bosses.)
U.S. Attorney Paul Fishman, Sept. 17, 2013; Solomon Leach, Philadelphia Daily News, Sept. 18, 2013
- Former Assemblyman Al Coutinho pleaded guilty to stealing $32,500 from his family’s charitable foundation and to failing to disclose the income on his legislative financial disclosure forms, as required by law. Prosecutors said between 2008 and 2012, Coutinho personally cashed numerous checks totaling $32,500 (donations to the foundation) and then used the money for his own personal benefit and for purposes unrelated to any legitimate foundation-related business. “The lesson here is that no one is above the law, including those charged with making the law,” said Elie Honig, director of the Division of Criminal Justice with the state Attorney General’s Office. But the public needs to decide whether that’s really true. The state has recommended probation, instead of the six and a half years Coutinho faces. The plea deal also means that Coutinho, who has resigned as assemblyman (D-Essex), will be permanently barred from holding public office or public employment and must replay the $32,500. But as Bob Ingle said, “Some question if the administration of Gov. Chris Christie hasn’t gone soft on crime with what amounts to a slap on the wrist. They ask if there is one set of rules for public officials and another for the rest of the population?” Sentencing is set for October. The Bernardino Coutinho Foundation, a nonprofit charitable organization run by the Coutinho family, focused on events in the Portuguese community of Newark’s Ironbound district. It was best know for its annual Portuguese Day Festival, which it no longer was involved in after 2009.
Acting Attorney General John Hoffman, Sept. 12, 2013; Jarrett Renshaw, Star-Ledger, Sept. 12, 2013; Bob Ingle, Asbury Park Press, Sept. 13, 2013
- Former Bergen County Democratic Party chief Joe Ferriero made The Soprano State’s Chapter 3 as a second-tier political boss, but he now ranks up there with the big guys who have been indicted. For Ferriero, it is a second indictment. The first resulted in a conviction that was vacated after a court ruling narrowed what was needed to convict someone for honest services fraud. In the new indictment, Ferriero is charged with a racketeering scheme involving kickbacks paid to a public official, soliciting and accepting bribes as a party official and extortion. He faces 70 years in prison if convicted on all the charges. The feds charge that from 2001 to 2008 Ferriero conducted the affairs of the Bergen County Democratic Organization through a pattern of racketeering activity involving three illegal schemes: a kickback scheme involving a government consulting company (the prior indictment), a retail and entertainment project bribery and extortion scheme, and a computer company bribery scheme. Ferriero is charged with soliciting $1.7 million ($35,000 a month) from a Virginia real estate investment trust for agreeing not to publicly oppose the company’s Xanadu proposal to the New Jersey Sports & Exposition Authority. The indictment also charges that Ferriero agreed to recommend a software developer to public officials in Bergen County in return for one-quarter to one-third of the gross receipts from any contracts that resulted from his efforts. “The conduct alleged in today’s indictment is another unfortunate example of someone misusing their position in our political system for personal gain,” said FBI Special Agent in Charge Aaron Ford. The defense lawyers for Ferriero said the feds are engaged in a “crucade” against their client and the charges have no basis.
U.S. Attorney Paul Fishman, Sept. 11, 2013; Jason Grant, Star-Ledger, Sept. 11, 2013.
- The Birdsall Services Group was sentenced to the max, a $1 million fine, for making hundreds of thousands of dollars in illegal political contributions to win the company millions of dollars a year in public contracts it would have been barred from by the state’s play-to-pay law. The firm pleaded guilty to the charges of money laundering and making false representations for government contracts. Superior Court Judge Wendel Daniels of Ocean County ordered the company to pay two major criminal penalties within 10 days: a $500,000 public corruption profiteering penalty and a $500,000 anti-money laundering profiteering penalty. The company already paid the state $2.6 million to settle a civil action filed by the state Attorney General’s Office in connection with the criminal case. The firm is required to cooperate with the prosecution of individual defendants in the case and is barred from working on government contracts in New Jersey for 10 years. The firm, however is no longer in business. It filed for bankruptcy, and its assets were sold to a California engineering company. “The maximum penalties that must be paid by Birdsall Services Group are in keeping with the scope of the criminal scheme that led to its ruin,” said First Assistant Attorney General Thomas Calcagni. “This case is about upholding our pay-to-play law and safeguarding the integrity of public contracting in New Jersey to ensure that taxpayers don’t foot the bill for political favors.”
First Assistant Attorney General Thomas Calcagni, Aug. 30, 2013
- Here’s an addition to Chapter 6, “The Run for the Roses Starts in the Boondocks: ” A 79-year-old Hopatcong councilwoman, charged with shoplifting and leading police on a “low-speed” pursuit, failed to appear in court for the second time. Her lawyer asked for a second adjournment when the court only allows one. Next time she doesn’t show, a bench warrant will be issued. Estelle Klein, a councilwoman from 2003 to 2008, was re-elected to a third term in 2012. Police charge that she paid for some items at a ShopRite in Netcong, but hid filet mignon, roast beef, guacamole and creamer (worth a total of $40) in her pockets. Police were called, spotted her vehicle and tried to pull her over, but were led on a 25 to 50 mph, three mile chase, according to the charges. Police said Klein was combative and would not leave her car, but was polite during processing at the station.
Brent Johnson, Star-Ledger, Aug. 22, 2013; Staff report, Daily Record, Aug. 6, 2013
- In another update to Chapter 6, the longtime Democratic Party chairman of Woodland Park pleaded guilty to bribing two individuals he thought were IRS agents. Michael Kazmark, 60, admitted paying $18,500 to the two (an IRS and an FBI agent) posing as IRS agents. According to the feds, Kazmark failed to pay federal income taxes from 1997 to 2005 and owed the IRS $98,046. He paid the bribes in an effort to delay paying the back taxes and to reduce the amount he owed, prosecutors said. The feds secretly recorded Kazmark paying the bribes. He served as Democratic Party chairman for 12 years and was a member of the Democratic State Committee for four years.
U.S. Attorney Paul Fishman, June 21, 2013; Stephanie Akin, The Record, June 20, 2013
- New Jersey’s taxes have made it one of the 10 worst states for people to retire, according to a special report to CNBC. What puts New Jersey on the list of “hostile” territories for retirees is no surprise: the nation’s highest mean property tax rate. Its income tax ranges from 1.4 percent to 8.97 percent. Sales taxes are 7 percent. Not a pretty picture for those on a fixed income.
Shelly Gigante, Special to CNBC, Aug. 22, 2013
- In addition to making the worse rankings for retirees, New Jersey also claims one of the seven most dysfunctional state political parties, according to CQ Roll Call: the New Jersey Democratic Party. The seven state parties were selected based on interviews with national and local operatives, elected officials, former and current staff and local news reports. CQ Roll Call considered the extent of a party’s dysfunction and its affect on midterm elections. Roll Call said the NJ Democratic Party’s problems could be boiled down to two words: Chris Christie. It also noted that Jon Corzine propped the party up with his own personal fortune and then left it “flatfooted.” A closer look at The Soprano State by Roll Call would have revealed that the NJ Democratic Party’s problems go far beyond the affects of Chris Christie and the damage of Corzine.
Abby Livingston, CQ Roll Call, July 23, 2013
- The tenure of James Habel as superintendent of schools in Wall Township, Monmouth County, is a saga of perks gone awry even for New Jersey and then charges of criminal wrongdoing. The Daily Record laid some of the blame at the feet of the Wall Township Board of Education. When Habel went on medical leave early in 2012 and lived in Florida, the Board of Education still paid hundreds of dollars a month in expenses, including the cost of car washes, gas, a satellite radio and half his cable TV bill. “The former wrestler and coach was used to getting what he asked for from the school board,” The Daily Journal reported. Now, the Monmouth County prosecutor has charged Habel with more than the lavish perks. He is charged with defrauding taxpayers of $361,992 in vacation payments and tampering with records by shredding official documents and ordering e-mails deleted. When Habel retired, he was paid for 110 vacation days he actually had used, prosecutors charged. In addition, prosecutors said he repeatedly cashed in vacation days, then deposited the money into tax-deferred accounts, but never deducted the cashed-in days from his balance of vacation days. He also is charged with trying to conceal criminal activity by directing subordinates to delete and destroy records, by directing the IT director to delete e-mails from the school district’s computers (The employee didn’t follow the directive) and by shredding or removing files from his office. In addition, Habel is charged with mortgage fraud and with failing to report allegations of a sex crime to police. (The allegations were later determined to be false.) He has pleaded not guilty to all charges.
Jean Mikle and Susanne Cervenka, Daily Journal, Aug. 14, 2013, Acting Monmouth County Prosecutor Christopher Gramiccioni, June 17, 2013
- The Briad Group, which has the franchise for T.G.I. Friday’s in New Jersey, has agreed to pay a $500,000 fine and will not contest charges that eight of its restaurants were serving a cheap substitute for the liquor customers ordered. In addition, the state Division of Alcoholic Beverage Control will appoint a monitor to oversee Briad’s operation in New Jersey for about a year. This ranks right up there with New Jersey needing a federal monitor for its medical university. It just keeps the Soprano State at the top of the pile for negative national attention with prosecutors monitoring everything from universities to bars. “This fine should send a clear message to every bar and restaurant throughout New Jersey that customers should get what they pay for every time without exception,” said Acting Attorney General John Hoffman. In May, more than 100 investigators raided 29 bars in New Jersey in what was dubbed Operation Swill. Of those raided, 13 were owned by Briad where they seized 250 bottles of spirits. Eight of the T.G.I Friday’s were charged in West Orange, East Windsor, Old Bridge, Piscataway, Freehold, Marlboro, Hazlet and Linden. A total of 1,000 bottles of vodka, gin, rum scotch, whiskey and tequila were seized in the raid. The investigation continues, Hoffman said.
Acting Attorney General John Hoffman, July 31, 2013
- Keeping even NJ reality TV in the national spotlight, the feds have charged two stars of the Bravo reality TV series “The Real Housewives of New Jersey” with fraud. Teresa Giudice and her husband Giuseppe “Joe” Giudice of Towaco were charged with making false statements on loan applications and with bankruptcy fraud. Joe also was charged with failing to file tax returns for 2004 through 2008 when the feds said he earned nearly $1 million. “The indictment returned today alleges the Giudices lied to the bankruptcy court, to the IRS and to a number of banks,” U.S Attorney Paul Fishman said. Between 2001 and 2008, the two submitted applications for loans and mortgages indicating they were receiving substantial salaries, when they were not, prosecutors said. Later, when filing for bankruptcy in 2009, they intentionally concealed businesses they owned and income Teresa received from the TV show and personal appearances, the feds charged. Known on the show for her expensive tastes, Teresa has a line of cookbooks and specialty foods. The two have pleaded not guilty to the charges.
U.S. Attorney Paul Fishman, July 29, 2013, FoxNews and Associated Press, Aug. 14, 2013
- A federal judge sentenced cardiologist Shashi Agarwal to two years and six months in prison. And rightfully so. Agarwal was one of 12 doctors and a nurse practitioner arrested in December 2011 and charged with accepting cash kickbacks for test referrals. Agarwal pleaded guilty to receiving more than $100,00 in cash kickbacks. From 2009 to 2001, Orange MRI gave him $100 for each Medicare or Medicaid patient referral for an MRI and $50 for each CAT scan referral, the feds said. The federal investigation led to the arrest of 15 people, including the doctors arrested in 2011. Of those charged, 12 have pleaded guilty. In another case, Frank Santagelo, a Morris County doctor, pleaded guilty to accepting $1.8 million in bribes for referring millions of dollars in testing to Biodiagnostic Larobatory Services of Parsippany. “The investigation of Dr. Santangelo is another sad story of a doctor putting his greed ahead of his oath of fidelity to patients,” said FBI NJ Special Agent in Charge Aaron Ford. Santangelo received more than $1.8 million in bribes from BLS for referrals that paid the lab more than $6 million from Medicare and insurance companies, the feds said. David and Scott Nicoll and four others associates of BLS pleaded guilty to charges related to the case. To date, nine employees or associates of BLS and four physicians have pleaded guilty to the bribery scheme. An e-mail, between Santangelo and BLS part owner David Nicoll, revealed some of the testing ordered in exchange for the bribes was unnecessary. As if that wasn’t enough in one month, Livingston physician Yash Khanna was indicted by the feds and charged with conspiring to receive thousands of dollars in cash kickbacks for referring patients for MRIs and CAT scans. The feds charged that the conspiracy lasted at least three years and that Khanna failed to file income tax returns for about $1 million, including the kickbacks, from 2008 to 2010. The kickback agreement paid Khanna $50 for each MRI referral of a Medicare or Medicaid patient and $75 for an MRI referral for a patient with private health insurance, the feds said.
U.S. Attorney Paul Fishman, July 11, 2013, July 24, 2013
- Federal Judge Jose Linares sentenced the director of operations for the North Bergen Housing Authority to three years and 10 months in prison for extorting cash from employees of a company that did grounds and maintenance repairs for the authority. John Kennell pleaded guilty to accepting cash payments of between $100 and $400 from employees in exchange for bogus paid vacation days. Kendall told the company that the employees were working at the authority when they were actually traveling outside the United States. Kennell received up to $2,500 for his role in a scheme that cost the company $12,498 in unauthorized vacation pay. In addition to the vacation scam, Kennell regularly extorted the employees of the company for cash payments of between $10 and $20 twice per month, the feds charged.
U.S. Attorney Paul Fishman, July 23, 2013
- The developer of three Trenton affordable housing projects has been indicted and charged with diverting money from the projects for his own use. Robert Kahan faces 25 counts of bank fraud, mail fraud and false loan applications. “As alleged in the indictment, Kahn took money intended for projects designed to help those in need of affordable housing and used it for his own ends,” said U.S. Attorney Paul Fishman. “It isn’t just defrauded financial institutions and programs that lose: it’s the people of our cities who are the most vulnerable.” The feds charge that Kahan lied on loan applications for the low-income housing projects and used substantial portions of the money for his own personal use, his other development projects and other unauthorized uses. Kahan allegedly spent hundreds of thousands of dollars from housing projects on personal items, including a Florida condo, which he used to secure bail, and his daughter’s wedding, according to the Times of Trenton. Kahan pleaded not guilty to the charges.
U.S. Attorney Paul Fishman, July 18, 2013, Alex Zdan, Times of Trenton, Aug. 1, 2013
- State Comptroller Matthew Boxer has come up with another good one. Pure Soprano State. Boxer referred 83 public employees for prosecution, saying they lied about their income to get their kids into the free school lunch program. In addition to the 83, Boxer said he found 26 family members of public employees who gave false information to get the free food. The Boxer investigation of 15 school districts concluded that there was widespread fraud in the National School Lunch Program in New Jersey. Among those believed to have lied on the forms are 40 school district employees and six elected school board members from Pleasantville, Newark and Patterson. “Dozens of public employees appear to have lied about their income in order to take advantage of a school program designed to help families in need,” Boxer said. The way the federal lunch program is structured, applications get little review for accuracy. Boxer said he started the investigation out of concern that public employees who knew about the lack of monitoring were taking advantage of the system to get benefits they did not deserve. The fraud has other fiscal implications because school districts get additional state aid based on the number of children they have in the free lunch program. The investigation first began with the arrest of Marie Munn, president of the Elizabeth Board of Education, who was charged with lying to get federally funded free lunches for her two children.
State Comptroller Matthew Boxer, July 17, 2013
- The controversy surrounding Rutgers University never seems to end. The Record’s report that university President Robert Barchi is collecting hundreds of thousands of dollars for privately advising two firms that do millions of dollars of business with Rutgers added to the pile of negative attention for the university. “It smells to high hell quite frankly,” Jay Lorsch of Harvard Business School, told the Record. Barchi, who is overseeing the merger of Rutgers with the University of Medicine and Dentistry of New Jersey, has the approval of the university to sit on the advisory boards of the two firms and told the Record he stays out of university decisions involving the companies. What raises the most concern is that the two private companies do business with Rutgers and that Barchi is paid for his services to the private firms. Last year, the two companies paid him a total of $317,000 in fees and stock to sit on their boards. The new controversy comes on the heels of national coverage of a sports scandal at Rutgers that resulted in some calling for Barchi to step down. Serious questions were raised about top management at Rutgers when basketball coach Mike Rice was fired for verbally abusing and shoving players and athletic director Tim Pernetti quit. Barchi assumed his post in September and said he was told about a video showing the abuse in November, but never viewed it until April, after he learned ESPN was going to broadcast it.
Shawn Boburg and Patricia Alex, The Record, July 14, 2013
- The feds have arrested a former claims manager for the New Jersey Turnpike Authority and charged him with stealing more than $120,000 from the authority’s coffers. Gerardo Blasi is charged with mail fraud and defrauding a state agency that receives federal funds. Blasi’s job was to collect payments from the insurance companies of insured drivers who caused damage to the turnpike. According to the feds, he told the insurance companies to issue checks to bogus repair companies, and when the checked were mailed to Blasi at the authority, he cashed the checks and kept some of the money for himself.
U.S. Attorney Paul Fishman, July 1, 2013
- The problems for Jon Corzine continue to pile up. The Commodity Futures Trading Commission filed a civil suit against Corzine, the former chief executive of MF Global, charging Corzine failed to diligently supervise the firm while customer funds were misused. The lawsuit accuses Corzine of failing to prevent Edith O’Brien, an assistant treasurer at the company, from transferring customer money to banks and clearinghouses to shore up MF Global’s financial losses. The company bet on the debt of European countries, and then when the overseas economy ran into trouble, used money in customer trading accounts to cover the liquidity gaps. The commission is looking to fine Corzine and O’Brien and to ban them forever from trading commodities on Wall Street. The lawsuit alleges that nearly $1 billion in customer money was used to shore up the firm. Customers with money in U.S. accounts have about 89 percent of their money back and are expected to recover more in bankruptcy proceedings. Corzine’s lawyer, Andy Levander, said the lawsuit is based on meritless allegations.
Scott Patterson, Aaron Lucchetti and Jamila Trindle, Wall Street Journal, June 28, 2013, Ben Protess, New York Times, June 27, 2013
- Former Middlesex County Sheriff Joseph Spicuzzo pleaded guilty to collecting bribes from those seeking positions or promotions in his department. Two men who worked under the former sheriff also pleaded guilty to the scheme that netted Spicuzzo about $112,000, according to state prosecutors. Under the plea agreement, the state will recommend a nine-year sentence for Spicuzzo, the loss of his state pension and a ban from public employment in New Jersey. Spicuzzo was Middlesex County’s sheriff for 30 years. When he was arrested in the bribery case, he resigned his 16-year post a Middlesex County Democratic Party chairman and his position as commissioner on the New Jersey Sports & Exposition Authority. “Spicuzzo’s long years in power corrupted him,” said Acting Attorney General John Hoffman. “It’s hard to fathom the greed and arrogance that would prompt a law enforcement leader to demand bribes of young recruits.” Spicuzzo solicited and accepted bribes of between $5,000 and $25,000 from seven people seeking jobs as investigators, prosecutors said. Darrin DiBiasi, a former sheriff’s investigator, and Paul Lucarelli, a suspended sheriff’s officer, admitted they conspired with Spicuzzo in the jobs-for-cash scheme.
Acting Attorney General John Hoffman, June 25, 2013
- This is an update to Chapter Five’s court jesters, in case you were in doubt. Superior Court Judge Carlia Brady, 41, who was sworn in April 5, was arrested and charged with hindering the apprehension of Jason Prontnicki. He is charged with robbing an Old Bridge pharmacy just 24 days after she was sworn in. Chief Justice Stuart Rabner suspended Brady without pay after she was charged with knowingly harboring the fugitive in her Woodbridge home. Law enforcement said the two had been dating and Prontnicki was arrested either at her home or as he was leaving her home. Brady was the first Filipino-American judge in New Jersey. She is the third sitting Superior Court judge suspended without pay after an arrest. Peter Coruzzi was suspended in 1981 for taking money in return for reducing a sentence. Stephen Thompson was suspended in 2003 for possession of child pornography. Both were convicted and removed from the bench.
Sue Epstein, Star-Ledger, June 13, 2013
- The engineering firm Birdsall Services Group pleaded guilty to a scheme that used its employees to make hundreds of thousands of dollars in illegal corporate political contributions to gain millions of dollars in government contracts that the firm otherwise would have been barred from by of the state’s pay-to-play law. The firm pleaded guilty to the charges of money laundering and making false representations for government contracts. Under the plea deal, the engineering firm must pay the state a $1 million fine and will be barred for 10 years from government contracts in New Jersey. The $1 million is in addition to the $2.6 million the company will pay in the civil action filed by the state Attorney General’s Office in connection with the criminal case. The company, which filed for bankruptcy, has been sold, and the $3.6 million will come from the proceeds of the sale. “This is a victory for the public and for all who believe that government contracts should be awarded fairly and openly, not handed to politically connected firms that pay for the privilege with campaign contributions,” said First Assistant Attorney General Thomas Calcagni. Charges of conspiracy and money laundering are still pending against seven former Birdsall executives. The California firm purchasing Birdsall will not be barred from doing business in New Jersey. Birdsall Services Group, its former CEO Howard Birdsall, and six of its executives and shareholders were indicted and charged with violating the state’s pay-to-play law by disguising the corporation’s illegal political contributions as personal contributions from the firm’s employees. The company reimbursed those employees and shareholders with company funds, prosecutors said. The scheme allowed Birdsall to hide contributions that would have disqualified the company from contracts with certain government agencies, according to the charges.
Acting Attorney General John Hoffman, June 13, 2013; Kathleen Hopkins, Asbury Park Press, June 13, 2013; Attorney General Jeffrey Chiesa, March 26, 2013
- The Star-Ledger wrote, “Even in death, Frank Lautenberg is causing trouble.” And that would have made him smile. The passing of the 89-year-old five-term senator has kicked off a firestorm among Republican and Democratic pols over Gov. Christie’s decision to hold a special election to select a replacement. Christie named state Attorney General Jeffrey Chiesa to fill the Senate seat until the special election, an Aug. 13 primary and an Oct. 16 general election. Chiesa will not run in the election. At issue is the cost of the $12 million special election in October, one month before the gubernatorial election, and the effect of the shortened schedule on the candidates. The governor says he wants a speedy election by the people. Skeptics say he wants to keep the Senate election from affecting his own.
Matt Friedman and Jarrett Renshaw, Star-Ledger, June 9, 2013
- Newly hired Rutgers University athletic director Julie Hermann said she is ready to deal with the national embarrassment. But maybe the taxpayers who fund Rutgers, the students, and their parents, are not. The athletic scandals at Rutgers have raised serious questions about management at the top, the priorities of the state’s largest university and the waste of money. Rutgers is spending another $150,000 for a public relations firm to help with the crisis. It spent $70,000 for a background check of Hermann that failed to uncover accusations from her former volleyball payers of verbal and emotion abuse. Hermann was hired to clean up just such a mess at Rutgers. Basketball coach Mike Rice was fired after a video surfaced showing him verbally abusing and shoving players. Athletic Director Tim Pernetti then quit. As they went out the door, Pernetti got $1.2 million in salary and Rice got $1.1 million. Rutgers president Robert Barchi has given his support to Hermann amid cries by the likes of state Sen. Dick Codey, who has called for her to step down. At play may be the possibility that if Rutgers pushes her out, it may be liable for her five-year $2.25 million contract. As for Hermann, she says she does not recall being accused of abuse 17 years ago by volleyball players at the University of Tennessee. She said she was an intense coach, but never crossed the line to abuse. She also did not recall being a bridesmaid in the wedding of a former assistant coach who later won $150,000 in a pregnancy discrimination lawsuit. A video documented Hermann’s attendance at the wedding (where she caught the bride’s bouquet) and her comments about the effects a future pregnancy by the assistant coach might have on coaching.
Kelly Heyboer and Ted Sherman, Star-Ledger, June 9, 2013; Ryan Dunleavy, USA TODAY, June 5, 2013; Bob Ingle, Asbury Park Press, May 30, 2013; Keith Sargeant, USA TODAY, May 26, 2013
- As if the Rutgers scandals are not enough embarrassment, Comptroller Matthew Boxer found that New Jersey, over a 22-month period, wrongfully paid inmates $23 million in government assistance. What Boxer found is inmates getting unemployment benefits, Medicaid coverage and food stamps, all while taxpayers are paying for their incarceration, their medical care and their meals. “Suffice it to say that when thousands of inmates are collecting unemployment checks from behind bars, there is a serious gap in program oversight,” Boxer said. State agencies failed to check county, and sometimes state, inmate information before sending out the money that those in prison are disqualified from getting. The state has promised to do better in the future and to try to recover the money that already went out. More than $10 million in unemployment benefits were paid to more than 7,600 inmates. One inmate got more than $39,000 for over a year while jailed on drug-related charges. The audit also found jailed state workers using sick leave during their incarceration, something even New Jersey doesn’t allow. After the story made national headlines, Bob Ingle asked, “Why are the state employees who let this happen still on the payroll? When are we going to have accountability for sloppy work and waste?”
Comptroller Matthew Boxer, May 29, 2013; Bob Ingle, Asbury Park Press, May 29, 2013
- This story also found legs everywhere. For example, the Trentonian story on Operation Swill was picked up by the Denver Post. Whether its problems at Rutgers, or convicts getting unemployment, or dirty water passed off as high-end liquor, New Jersey lives up to its reputation as The Soprano State. After a year-long investigation, the state Attorney General sent more than 100 investigators to raid 29 restaurants and seize 1,000 bottles of purported high-end liquor. The raid followed the covert taking of 150 samples at 63 licensed establishments. What did they find? A New Jersey bar allegedly mixing rubbing alcohol with food coloring and serving it as scotch. A bar allegedly putting dirty water into a bottle and serving it as liquor. The state’s Division of Alcoholic Beverage Control alleged that the 29 establishments were filling premium brand bottles with non-premium brands. “It’s a slap in the face to the consumer,” said then Attorney General Jeffrey Chiesa. Of the 150 samples covertly tested, 30 were not the brand they were supposed to be, Chiesa said. The restaurants in question were scattered across New Jersey from Gloucester Township to North Brunswick to Morristown and Parsippany and Lambertville. Thirteen of the restaurants were TGI Fridays. Rick Barbrick, president of Briad Group, which operates the franchised restaurants, said the raid was both troubling and surprising and the company would conduct an internal investigation.
Attorney General Jeffrey Chiesa, May 23, 2013; Brent Johnson and Peggy McGlone, Star-Ledger, May 23, 2013
- Once again, you could not make this stuff up. The manager of the Tick Tock Diner in Clifton has been charged with hiring a hit man to kill his uncle, who co-owns the diner. Georgios Spyropoulos is charged with conspiracy to commit murder, attempted murder and unlawful possession of a weapon. According to the charges, this is what happened: he hired a hit man (who was really an undercover state cop) to kill his uncle, and the conversations were secretly recorded. The hit man was supposed to first obtain the combination to the safe at the diner, then pose as an exterminator to get the money out of the safe. The would-be murderer would be paid $20,000 to kill the uncle and dispose of the body. If the uncle’s wife got in the way, she also should be killed. Investigators said the motive was greed. Prosecutors say Spyropoulos thought he was not getting enough of the diner profits. According to authorities, he gave the hit man a revolver wrapped in two dishtowels and a pastry box with roach spray and insect traps to help with the exterminator ruse. The lawyer for the accused, who pleaded not guilty, said the family of “passionate personalities” is embarrassed and a “close-knit” family, despite the charges. Only in New Jersey.
Samantha Henry, Associated Press, April 10, 2013; Associated Press, April 12, 2013
- The downfall of MF Global Holdings Ltd brokerage was the result of negligent conduct by CEO Jon Corzine and two other company executives, according to former FBI director Louis Freeh who serves as the company’s bankruptcy trustee. Freeh, who has sued to recover damages, said the conduct of the three contributed to a loss of up to $2.1 billion. Freeh’s report attributed the company’s collapse to “the risky business strategy engineered and executed by Corzine and other officers and their failure to improve the company’s inadequate systems.” A spokesman for former Gov. Corzine called the report “Monday morning quarterbacking” and said there was no basis to the claim that Corzine was negligent. MF Global went bankrupt in 2011, less than two years after Corzine assumed the post of CEO. The company bet on the debt of European countries, and then when the overseas economy ran into trouble, used money in customer trading accounts to cover liquidity gaps.
Tom Hals, Reuters, April 4, 2013, Tiffany Kary and Phil Milford, Bloomburg, April 23, 2013
- In another Soprano State episode, Rutgers University men’s basketball coach Mike Rice was fired after a video went nationwide showing Rice shoving and kicking players, throwing balls at them, and shouting gay slurs. The resignation of athletic director Tim Pernetti quickly followed. More than a dozen faculty members called for Rutgers President Robert Barchi to resign. Barchi assumed his post in September and said he was told about the video in November, but never viewed it until April, after he learned ESPN was going to broadcast it. The university had suspended Rice, fined him and sent him to anger management counseling. He was not fired until the video went public. Barchi is a scientist hired to head Rutger’s merger with the University of Medicine and Dentistry of New Jersey, the only medical school in the nation to have been taken over by the feds. (Chapter One) Gov. Christie called Rice an animal, but said Barchi’s decision not to view the video sooner, while a mistake, is not one that should get him fired. This black eye for the state will be costly. Pernetti is slated to receive $1.2 million in salary, an iPad, a car allowance and more than two years of health insurance, according to the Associated Press. Rice will be paid $1 million, or 75 percent of his salary, plus a $100,000 bonus for staying through the 2012-13 season. Faculty members, who called for Barchi to resign, had this to say in a letter to the Board of Trustees: “It is indicative of (university) President (Robert) Barchi’s views of diversity that he only fired Coach Rice after media attention forced him to do so.” They also said, “He has known about Coach Rice’s homophobic, misogynist, and abusive behavior for several months now.” According to the Star-Ledger, the faculty writing the letter included the dean of Rutgers-Newark’s graduate school, Maggie Shiffrar, and the head of the women’s and gender studies department, Belinda Edmondson. As more faculty members called for Barchi’s resignation, others supported him, among them, Roger Jones, chair of the university's chemistry and chemical biology department.
Eugene Paik, Star-Ledger, and Brian Amaral, nj.com, April 3, 2013; Dave D’Alessandro, Star-Ledger, April 6, 2013; Associated Press, April 8, 2013; April 4, 201
- Beverly Hall already had a place in The Soprano State. Chapter Six. Gov. Christie Whitman took over the Newark school system and brought Hall in to save it. When the state took over, the Newark school system was flush with $58 million. In 1999, before Hall left for Atlanta schools, “shortcomings” already had been found. By 2000, Sen. Robert Martin was asking questions about how more than $100 million in spending could not be accounted for. Unpaid bills of $9 million were found in school district drawers. As Atlanta’s superintendent of schools, Hall was lauded for her accomplishments. In 2009, the American Association of School Administrators named her national superintendent of the year. But in recent years, reporters for the Atlanta Journal-Constitution and state education officials found unusual increases in Atlanta school test scores and high numbers of erasures on answer sheets. After a four-year investigation, a grand jury indicted Hall and 34 others on charges that they conspired to cheat on standardized tests. The indictment charged Hall and the others with racketeering, theft, making false statements and false swearing. The indictments were the result of former Gov. Sonny Perdue appointing special investigators to look into the cheating allegations. Investigator Richard Hyde said he found “nothing but pervasive and rank thuggery.” In the case of Parks Middle School, high test scores resulted in the loss of $750,000 in state and federal aide, according to investigators. District Attorney Paul Howard said the crimes were committed “against the children of the city of Atlanta.” Hall denied the charges and any cheating. She faces up to 45 years in prison.
Rhonda Cook and Alan Judd, Atlanta Journal-Constitution, March 29, 2013; Michael Winerip, New York Times, March 29, 2013
- Gov. Christie has decided to add Camden to cities where the state has taken over school systems. Camden joins Newark, Jersey City and Paterson. Camden’s four-year graduation rate was 57 percent in 2011, dropping to 49 percent in 2012, 37 points below the state average. Christie said the district is at a breaking point. The governor will appoint a new superintendent. Substitute teachers will be replaced with regular teachers. Students will get books and access to technology. That’s a start. The state faces a heavy challenge. Students in the city deserve better than they have been getting for years. Let’s hope the state can deliver.
Matt Katz, Claudia Vargas and Joelle Farrell, Inquirer, March 27, 2013
- The engineering firm Birdsall Services Group, its former CEO Howard Birdsall, and six of its executives and shareholders were indicted and charged with violating the state’s pay-to-play law by disguising the corporation’s illegal political contributions as personal contributions by the firm’s employees. Shareholders and employees made personal political contributions of $300 or less, which are not required to be reported, according to the indictment. The company then reimbursed those employees and shareholders with company funds, prosecutors said. The scheme allowed Birdsall to hide contributions that would have disqualified the company from contracts with certain government agencies, according to the charges. The contributions also were omitted from documents filed with the Election Law Enforcement Commission, prosecutors said. For-profit businesses in New Jersey that have received $50,000 or more in public contracts in a calendar year must report those contracts and political contributions to the ELEC. Philip Angarone, former marketing director for Birdsall, and Eileen Kufahl, a former marketing manager, admitted to being part of the scheme.
Attorney General Jeffrey Chiesa, March 26, 2013
- Just when you think you’ve seen about everything in New Jersey, something comes along that amazes. The case of Joe Cryan and Karen Golding made headlines long ago. Cryan, (Chapter 2) had just been named head of the Democratic State Committee when Golding was arrested for stalking him. Golding, who worked on Corzine’s 2000 campaign and wound up as a lobbyist for Prudential Financial, called Corzine for the $5,000 she needed to post her bond. In the middle of a dinner with state senate Democrats, Corzine sent an underling with the cash. Golding avoided a trial by entering a pretrial intervention program. She pleaded guilty to stalking a woman Cryan dated and said her behavior stemmed from the breakup of an affair with Cryan. He denied the relationship. Now, in the midst of a legal battle over the release of e-mails between the two, copies of the e-mails ended up in the driveway of a reporter for the New York Post. The Post told the world that more than 150 e-mails Cryan sent to Golding showed Cryan’s “insatiable lust for bondage, oral sex and spanking.” The e-mails were written when the Post noted, he “presumably” would be at one of two government jobs as assemblyman and undersheriff. He sent most of the e-mails from the AOL account listed on his official Assembly candidacy biography. Others were sent from his state government account and the account assigned to him as undersheriff. In one e-mail, he admitted sending the message while working at his legislative office on a Sunday. Cryan’s lawyer said Golding pleaded guilty to a crime and the e-mails are not relevant.
Josh Margolin and Jeane Macintosh, New York Post, March 25, 2013
- A federal judge sentenced former Hamilton Township Mayor John Bencivengo to three years and two months in jail. The sentencing came after a jury convicted Bencivengo of extortion, bribery and money laundering. The jury found Bencivengo guilty of taking $12,400 in bribes in exchange for using his official influence to help Marliese Ljuba, the health insurance broker for the township school district, keep her position, instead of putting the district’s health insurance contract out for bid. Conversations recorded secretly by the feds showed the mayor received the bribe in three payments. “His conviction, and today’s sentence, serve as reminders that the public trust is not for sale,” said U.S. Attorney Paul Fishman. Robert Warney, former director of community planning and compliance for Hamilton Township, also was sentenced to a year and a half in prison after pleading guilty to laundering a $5,000 bribe from Ljuba to Bencivengo. Warney accepted a check from Ljuba and then gave the money to the mayor in cash over several weeks.
U.S. Attorney Paul Fishman, March 22, 2013 and March 13, 2013
- A federal judge sentenced Ronald Salahuddin, Newark’s former deputy mayor for public safety, to one year and a day in prison for extortion conspiracy. A jury convicted Salahuddin and Sonnie Cooper, a Newark businessman, after a five-week trial. The feds said Salahuddin used his official position to steer demolition work to Cooper and to obtain contributions to organizations favored by Newark officials. Salahuddin agreed to steer work to an undercover operative for the feds, but Salahuddin said the operative had to give a portion of the work to Cooper Trucking, where Salahuddin had a concealed financial interest. Copper was sentenced to two years probation, including eight months of home confinement.
U.S. Attorney Paul Fishman March 4, 2013 and Feb. 11, 2013
- It’s The Soprano State forever. Some things just never change. New York prosecutors charged 32 people in an indictment that describes a mafia-controlled trash industry in New Jersey. The feds say Carmine Franco, long barred from the trash business and with alleged ties to organized crime, never really left the business. The indictment charges Franco and 28 others with using threats of physical violence and economic harm to control the trash industry in portions of New Jersey and New York. The threats and extortion were carried out by members and associates of the Genovese, Gambino and Lucchese mob families, the feds charge. The Mafia soldiers and associates ran a racketeering enterprise that dictated which areas trash companies could operate in and included taking payments for protection, according to the indictment. The feds also charged Franco with directing the stealing of garbage containers from rival trash companies in New York. Just like in the movies, the feds allege that decisions on which family would control a trash company were made during mob family sit-downs. “Organized crime still wraps it tentacles around industries it has fed off for decades, but law enforcement continues to pry loose its grip,” said New York U.S Attorney Preet Bharara. “The tactics they used to exert and maintain their control come right out of the mafia playbook.”
Jason Grant, Star-Ledger, Jan. 16, 2013
- One of the 44 rounded up in the infamous 2009 federal raid on politicians and others, Jersey City zoning official Maher Khalil will serve two years and six months in prison for accepting bribes. Kahlil admitted accepting bribes from Solomon Dwek, who was working with the feds. In return for bribes totaling $72,500, Khalil agreed to attempt to obtain real estate development approvals for Dwek. Kahlil, also Jersey City’s health and human services assistant director, said he accepted the bribes after arranging meetings between Dwek and Jersey City municipal officials. Judge Jose Linares, who issued the sentence, also ordered Kahlil to forfeit $72,500.
U. S. Attorney Paul Fishman, Jan. 14, 2013
- Lydell Sherrer, an assistant and deputy commissioner at the Department of Corrections, will spend 3 years and 10 months in prison for agreeing to find a job for a laid off worker in exchange for $10,000. Sherrer agreed to find the worker a job with corrections or with a corrections subcontractor and accepted a $5,000 first payment, according to the feds. Sherrer, who pleaded guility, admitted to taking $69,000 in bribes from eight individuals. Federal Judge Joel Pisano, who issued the sentence, also ordered Sherrer to pay $22,500 in restitution.
U.S. Attorney Paul Fishman, Jan. 3, 2013