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TRENTON
– Attorney General Anne Milgram and
Criminal Justice Director Deborah L. Gramiccioni
announced that an alarm system contractor
from Collingswood has been indicted on charges
he rigged bids in connection with more than
$230,000 in contracts with the New Jersey
Department of Corrections and two Camden
County municipalities.
According
to Gramiccioni, Paul Kerth, 57, of Collingswood,
owner of Independent Alarm Distributors,
Inc., was charged by a state grand jury
with conspiracy (2nd degree), conspiracy
in restraint of trade (2nd degree), two
counts of theft by deception (2nd and 3rd
degree), two counts of contract fraud (both
2nd degree), and two counts of misconduct
by a corporate official (2nd and 3rd degree).
The indictment was voted yesterday but filed
in court today.
Independent
Alarm, which is based in Kerth’s home,
was also named as a defendant in the indictment,
along with two other companies Kerth owns
that he allegedly used for rigging bids:
Adirondack Alarm and Automatic Alarm Associates,
both of Marlton.
The
indictment is the result of an investigation
by the Department of Corrections’
Special Investigations Division and the
Division of Criminal Justice Corruption
Bureau.
“We
charge that this contractor relied on deception
to skirt the competitive bidding requirements
for public contracts,” said Attorney
General Milgram. “Taxpayers should
not have to pay higher contract costs because
unscrupulous contractors engage in bid rigging
on government projects.”
The
indictment alleges that between April 1999
and December 2004, Kerth rigged bids in
order to obtain contracts with the Department
of Corrections to install alarm equipment.
The state investigation revealed that Kerth
and his companies rigged at least nine DOC
contracts with contract prices that, in
the aggregate, exceeded $230,000. Under
state law, Independent Alarm had to be the
lowest qualified bidder among at least three
independent bids submitted for each project
in order to win the contracts. It is alleged
that Kerth fraudulently arranged for his
other companies, Adirondack Alarm and Automatic
Alarm, as well as other contractors not
named in the indictment, to submit higher
“cover” bids, so Independent
Alarm would win the contracts.
On
Tuesday, Dec. 2, a subcontractor that Kerth
used, Edward F. Brewer Sr., 51, of Audubon,
pleaded guilty before Superior Court Judge
Thomas A. Brown Jr. in Camden County to
two counts of fourth-degree falsifying records.
He admitted that he arranged for a contractor
friend, Jozeph Caputa, to submit higher
bids so that Independent Alarm would win
two contracts from the Department of Corrections.
Brewer must pay $5,000 in restitution and
faces a five-year ban on doing business
with the state. On July 9, Caputa was charged
with two counts of third-degree theft by
deception. In return for Caputa’s
truthful statements before Judge Brown implicating
himself and others, and his agreement to
not seek public work for five years, the
state did not oppose Caputa’s application
for Pre-Trial Intervention, which was granted
by the court.
The
indictment further alleges that between
May 2000 and September 2004, Kerth used
his two other companies to fraudulently
submit higher bids so that Independent Alarm
could obtain two contracts with Haddon Township
totaling more than $20,000, and two contracts
with Oaklyn Borough totaling more than $30,000.
The
investigation was conducted and coordinated
for the Division of Criminal Justice Corruption
Bureau by Detective Sgt. Keith Lerner, Detective
Paul Marfino Jr., Detective David Patella
and Deputy Attorney General Steven J. Zweig.
Senior Investigators Manuel Alfonso and
Charles Walters led the investigation for
the Department of Corrections’ Special
Investigations Division. Deputy Attorney
General Zweig presented the case to the
state grand jury.
Attorney
General Milgram thanked the Department of
Corrections for its referral and extensive
assistance in the investigation.
The
indictment was handed up to Superior Court
Judge Gerald J. Council in Mercer County,
who assigned it to Camden County, where
Kerth will be ordered to appear in court
at a later date to answer the charges.
Second-degree
crimes carry a maximum sentence of 10 years
in state prison and a criminal fine of $150,000,
while third-degree crimes carry a maximum
sentence of five years in prison and a $15,000
fine. The corporate defendants could face
fines of up to triple the aggregate amounts
of any contracts they are found to have
received through bid rigging.
The
indictment is merely an accusation and the
defendants are presumed innocent until proven
guilty. A copy of the indictment is available
with this press release at www.njpublicsafety.com.
Attorney
General Milgram noted that the Division
of Criminal Justice - Corruption Bureau
has established a toll-free Corruption Tipline
for the public to report corruption, financial
crime and other illegal activities. The
statewide Corruption Tipline is 1-866-TIPS-4CJ.
Additionally, the public can log on to the
Division of Criminal Justice Web site at
www.njdcj.org
to report suspected wrongdoing. All information
received through the Division of Criminal
Justice Corruption Tipline or Web page will
remain confidential.
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