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TRENTON
– Attorney General Anne Milgram and
Criminal Justice Director Deborah L. Gramiccioni
announced that an individual who served
as Essex County’s consultant on contracts
involving replacement and repair of boiler
systems was indicted today on charges he
steered contracts to companies that paid
him $500,000 as a consultant, inspector
and salesman.
According
to Gramiccioni, the Division of Criminal
Justice obtained a state grand jury indictment
charging Melvyn Neishloss, 68, of Howell,
with official misconduct and unlawful speculation
on official action or information, both
in the second-degree. His company, Superior
Combustion of New Jersey, Inc., is also
named as a defendant in the indictment for
all of the charges except official misconduct.
The
indictment is the result of an investigation
by the Essex County Office of Inspector
General conducted in coordination with the
Division of Criminal Justice.
“There
is no room for self-dealing in government
contracting, which should involve an impartial
and transparent pursuit of the public interest,”
said Attorney General Milgram. “This
defendant used his position as a consultant
for Essex County to write himself into every
aspect of county boiler projects, steering
business to companies that hired him and
obtaining a personal profit of half a million
dollars.”
Between
December 1997 and March 2004, Neishloss
allegedly used his position as a consultant
for the Essex County Department of Public
Works to steer three contracts for installation
of boilers and related equipment to a single
contractor, which hired him and his company
to provide an array of professional services,
including engineering services, permitting
services, purchasing of equipment and parts,
project management and “independent”
inspection services.
Neishloss
wrote job specifications that required that
his company be hired for such services by
the winning bidder. The specifications also
listed equipment and parts to be purchased
from specified manufacturers for which Neishloss
served as product sales representative.
As a result, Neishloss and Superior Combustion
made approximately $500,000 on the three
contracts.
As
the county’s consultant and project
manager, Neishloss was involved in all aspects
of the contracts. In addition to drafting
job specifications, he held meetings and
walk-throughs with prospective bidders,
reviewed bids, recommended what bids should
be accepted, ran project meetings, and reviewed
change orders submitted by contractors.
Prior
to projects being advertised for bids, Neishloss
improperly provided the job specifications
to companies that had hired him, giving
them an advantage in the bidding process.
In certain instances, he placed orders for
equipment before the contract was bid.
Neishloss
provided all bidders with a price quote
for the equipment and parts to be provided
by the manufacturers, as well as the services
that were to be provided by his firm, so
the price could be factored into the bids.
However, because all of the equipment and
parts were purchased through him as the
product sales representative for the manufacturers,
he was able to come back with a lower price
quote after the contract was awarded to
his favored contractor. One price quote
went from $1 million to about $650,000.
“This
defendant simultaneously represented each
of the main parties to these contracts:
the county, the winning bidder, and the
manufacturers who supplied equipment and
parts,” said Director Gramiccioni.
“He steadfastly pursued his personal
financial interests without regard to the
clear conflicts of interest he created.”
Attorney
General Milgram thanked Essex County Inspector
General Dominic J. Scaglione for the investigation
conducted by his office, which was led by
Investigator Michael McGaughran.
Supervising
Deputy Attorney General Mark Eliades and
Deputy Attorney General Robert Rowbotham
II are handling the case for the Division
of Criminal Justice and presented it to
the state grand jury.
The
indictment was handed up to Superior Court
Judge Maria Marinari Sypek in Mercer County,
who assigned the case to Essex County, where
Neishloss will be ordered to appear 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.
The corporate defendant could face fines
of up to triple the aggregate amount of
any contracts it is found to have received
through the alleged criminal conduct.
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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