TRENTON
- Attorney General Paula T. Dow and Criminal
Justice Director Stephen J. Taylor announced
that former Irvington Mayor Michael Steele
was sentenced to state prison today for
rigging school district contracts and taking
thousands of dollars in kickbacks as business
administrator for the Irvington Board of
Education.
According
to Director Taylor, Steele, 54, of Easton,
Pa., was sentenced to seven years in state
prison, including five years of parole ineligibility,
by Superior Court Judge Stephen B. Rubin
in Hunterdon County. The judge ordered that
Steele pay $120,000 in restitution to the
Irvington Board of Education and that he
be permanently barred from public employment
in New Jersey. Steele pleaded guilty on
Sept. 30, 2009 to second-degree charges
of official misconduct and pattern of official
misconduct.
“This
defendant is going to prison because by
rigging contracts and taking kickbacks,
he stole from the Irvington school district
and the taxpayers who fund it,” said
Attorney General Dow. “He had a duty
as business administrator to serve the students
of this struggling district as an honest
steward, but instead he corruptly chose
to serve himself.”
The
charges were part of a June 5, 2008 state
grand jury indictment that resulted from
an investigation by the Division of Criminal
Justice Corruption Bureau and the New Jersey
State Police Official Corruption Bureau.
In pleading guilty, Steele admitted that
he took thousands of dollars in kickbacks
on school district contracts. He retired
from the district in April 2008.
Deputy
Attorney General Erik Daab prosecuted the
case and handled the sentencing hearing
for the Division of Criminal Justice Corruption
Bureau.
The
state’s investigation revealed that
Steele engaged in two separate bid-rigging
schemes between 2003 and 2007 involving
two contractors and approximately $1.4 million
in contracts. The two contractors pleaded
guilty in August 2008, admitting that they
provided bribes to Steele in connection
with the schemes. Preston Lewis, 54, of
Dingmans Ferry, Pa., and William Hardy,
57, of Margate, Fla., each pleaded guilty
to offering an unlawful benefit to a public
servant for official behavior. Each contractor
was sentenced late last year to three years
of probation and a $5,000 fine. Both are
barred from government contracts in New
Jersey for five years.
“Fighting
corruption is a top priority for the Division
of Criminal Justice,” said Director
Taylor. “We will aggressively investigate
and prosecute any public official who unlawfully
uses his or her government position for
personal gain.”
The
investigation was conducted and coordinated
by Detective Kiersten Pentony, Detective
Robyn Greene, Detective Harry Maronpot Jr.,
and Deputy Attorney General Daab of the
Division of Criminal Justice Corruption
Bureau, and Detective Sgt. Geoffrey P. Forker,
Detective Sgt. 1st Class Joseph Celli III
and Detective Sgt. 1st Class Thomas T. Goletz
of the New Jersey State Police Official
Corruption Unit. The state Department of
Education assisted in the investigation.
The
investigation revealed that Steele, whose
annual salary was $120,000, would purchase
maintenance supplies for the district -
including cleaning chemicals, asphalt repair
compounds and salt for melting snow - from
Hardy’s maintenance supplies company,
WH Chemical Group in Margate, Florida, and
the company would pay Steele a “bonus”
of between $5,000 and $20,000 per order.
WH Chemical Group received approximately
$900,000 in district contracts.
Steele
would call Hardy and ask him the quantity
of products he needed to buy to get a kickback
in a particular amount. Steele would then
order supplies in the quantities stated
by Hardy, and Hardy would send the kickback
to Steele. While WH Chemical Group would
provide the agreed upon quantities of supplies
to the district, Steele created false purchase
orders that inflated the quantities. WH
Chemical Company could not match the prices
offered by competitors, so Steele made it
appear that the company was providing more
supplies to beat the other bids.
In
the second scheme, Steele rigged bids to
award contracts to Lewis, a Lakewood-based
contractor who owned Lone Star Consulting,
a construction company, and BMG Security,
a security camera installation company.
Steele rigged bids on at least 29 school
contracts involving those companies between
January 2003 and December 2007 and inflated
the contract prices to build in thousands
of dollars in kickbacks for himself.
Steele
would contact Lewis about school district
projects and instruct him to prepare a cost
estimate. Steele would then tell Lewis to
inflate the estimate to include a kickback
and submit the inflated bid to the school
district. Steele or Lewis would prepare
two fraudulent competing bids for the project
in higher amounts. Because Lewis’s
company always had the lowest bid, the Board
of Education would award his company the
contract. After he completed the work and
received a check from the district, Lewis
would meet with Steele to provide the kickback
in cash.
The
Division of Criminal Justice Corruption
Bureau has established a toll-free Corruption
Tipline 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 Tipline or Web page
will remain confidential.
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