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TRENTON
– Attorney General Anne Milgram announced
that John P. Corea, former director of the
Hoboken Parking Utility, was indicted today
on charges that he conspired to steal more
than $600,000 in parking meter revenue that
he allegedly split with a Toms River contractor
whose company was hired by the City of Hoboken
to collect coins from city parking meters.
According
to Criminal Justice Director Deborah L. Gramiccioni,
Corea, 45, of Hoboken, was indicted today
by a state grand jury on charges of conspiracy
(1st degree), financial facilitation of criminal
activity (money laundering) (1st degree),
official misconduct (2nd degree), theft by
unlawful taking (2nd degree), and misapplication
of government property (2nd degree).
The
contractor, Brian A. Petaccio, 49, of Toms
River, owner and president of United Textile
Fabricators LLC of Toms River, pleaded guilty
on Sept. 30 to an accusation charging him
with second-degree theft by unlawful taking
for stealing more than $1.1 million in coins
from Hoboken’s parking meters.
Corea
allegedly used his official position to steer
three separate no-bid contracts to United
Textile Fabricators in November 2005 to collect
the coins, count and manage them, and maintain
the city’s parking meters. United Textile
Fabricators is a coin-operated arcade game
manufacturer.
After
an audit in 2007 uncovered parking revenue
shortfalls, Petaccio and his company returned
approximately $575,000 to the city. However,
Petaccio admitted in pleading guilty that
he conspired with an official of the City
of Hoboken – whom he did not name in
court but had previously identified to investigators
– to divert an additional sum, in excess
of $600,000, which was never reported to the
city and which the two men split. It is alleged
that Corea is the official who conspired with
Petaccio and split the money with him.
“This
is an outrageous abuse of public trust,”
said Attorney General Milgram. “The
indictment charges that Corea used his position
as director of the Hoboken Parking Utility
to conspire with Petaccio in the theft of
more than $600,000 in parking meter revenue
that should have been used for the benefit
of the city and its residents.”
“Corea
used his authority to steer three no-bid contracts
to Petaccio, who admitted that he stole more
than $1.1 million from the city, including
funds in excess of $600,000 that he allegedly
split with Corea,” Milgram added.
Under
his plea agreement, Petaccio must pay $300,000
in restitution to the city and faces up to
seven years in state prison. He must cooperate
in the ongoing investigation by the Division
of Criminal Justice and the New Jersey State
Police.
“Local
governments and taxpayers are struggling enough
in these hard economic times without having
to bear the burden of officials and contractors
who misappropriate public funds, as alleged
here,” said Director Gramiccioni. “We
have made cases such as this one a top priority.”
The
case is being prosecuted by Deputy Attorneys
General Jeffrey J. Manis and Perry Primavera
of the Division of Criminal Justice Corruption
Bureau. The investigation was conducted by
Detective Peter Layng of the State Police
Official Corruption Bureau North Unit and
Sgt. Lisa Shea of the Division of Criminal
Justice Corruption Bureau, with the assistance
of Administrative Analyst Kathleen Ratliff,
also of the Division of Criminal Justice Corruption
Bureau. Deputy Attorney General Manis presented
the matter to the state grand jury and took
the guilty plea from Petaccio.
It
is alleged that while Corea was director of
the Hoboken Parking Utility, he improperly
solicited Petaccio and United Textile Fabricators
LLC and subsequently used his official position
to assist the company in obtaining the three
no-bid contracts. Each contract was for approximately
$27,000 per year, just under the relevant
statutory threshold at the time of $29,000,
above which public bidding would have been
required, allowing other companies to compete
for the work.
Between
June 2005 and April 2008, Corea allegedly
conspired with the company to steal and launder
more than $600,000 in parking meter revenues,
while continuing to use his official position
to assist United Textile Fabricators and conceal
its illicit activities. The company’s
contracts with the city were effectively terminated
by April 2008.
The
principal business of United Textile Fabricators
is the manufacture, sale and leasing of arcade
crane games, coin-operated machines with a
crane-like claw that the player uses to try
to grab a toy. The company installs its arcade
machines in businesses throughout New Jersey,
Pennsylvania and Delaware. The proceeds from
the machines, which are shared with the company’s
clients, are collected by company employees
and transported to the company’s warehouse
in Toms River where they are counted and bagged
for deposit into the company’s main
operating account at a local bank. The state’s
investigation determined that coins from Hoboken’s
parking meters were commingled with coins
from the company’s arcade machines and
deposited in one lump sum into the company’s
operating account, concealing the source and
ownership of the funds.
In
pleading guilty before Superior Court Judge
Francis R. Hodgson in Ocean County on Sept.
30, Petaccio admitted that he knowingly withheld
from the City of Hoboken approximately $575,000
in parking meter revenues and misappropriated
those public funds to pay a variety of personal
expenses and business expenses unrelated to
the company’s meter collection activities
on behalf of the City of Hoboken. The state’s
investigation determined that those personal
expenses included credit card bills and car
payments for a Porsche and a Mercedes. Petaccio
and his company ultimately returned these
funds to the city in several installments
between October and December 2007, following
an audit and inquiry by the city's financial
consultants and outside accountants.
However,
it is alleged that, in addition to the $575,000
that Petaccio returned the city, he and Corea
conspired to steal additional funds exceeding
$600,000, which were never reported to the
city. The two men allegedly worked out a scheme
in which Petaccio reported to Corea the amount
of coins collected each day, and Corea would
tell him how much to put aside as the “take”
to be split between them.
The
first-degree money laundering charge carries
a maximum sentence of 20 years in state prison
and a fine of up to $500,000. Corea could
also face a potential anti-money laundering
penalty of up to three times the value of
the property involved. Second-degree crimes
carry a maximum sentence of 10 years in state
prison and a $150,000 fine.
In
addition, the official misconduct charge carries
a mandatory minimum sentence of five years
in prison without parole and a lifetime ban
on any future public employment. Therefore,
if Corea is convicted of both the first-degree
money laundering charge and the second-degree
official misconduct charge, he faces a mandatory
minimum sentence of 15 years in prison without
parole.
The
indictment is merely an accusation and the
defendant is presumed innocent until proven
guilty. The indictment is posted with this
press release at www.njpublicsafety.com.
The
indictment was handed up to Superior Court
Judge Pedro J. Jimenez Jr. in Mercer County,
who assigned the case to Ocean County, where
Corea will be ordered to appear in court at
a later date to answer the charges.
Attorney
General Milgram and Director Gramiccioni noted
that the Division of Criminal Justice has
established a toll-free Corruption Tipline
for the public to report corruption, financial
crime and other illegal activities: 1-866-TIPS-4CJ.
Additionally, the public can log on to the
Division Web site at www.njdcj.org
to report suspected wrongdoing. All information
received through the Tipline or Web page will
remain confidential.
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