TRENTON
–Attorney General Paula T. Dow and
Criminal Justice Director Stephen J. Taylor
announced that a contractor from Red Bank
was sentenced to state prison today for
making false representations in connection
with state contracts awarded by former Department
of Corrections administrator Gerald T. Kennedy.
Kennedy previously pleaded guilty to orchestrating
a bid rigging and kickback scheme involving
hundreds of thousands of dollars in state
contracts.
According
to Director Taylor, Mark Stermer, 43, of
Red Bank, was sentenced to three years in
state prison by Superior Court Judge Ira
E. Kreizman in Monmouth County. Judge Kreizman
also imposed a fine of $22,500. Stermer
and his company, Steel Grey LLC, are barred
from doing business in New Jersey for 10
years. On Feb. 16, Stermer and SteelGrey
LLC pleaded guilty to a second-degree charge
of making false representations for government
contracts.
In
pleading guilty, Stermer admitted that he
submitted a fraudulent financial statement
and false information about past projects
of the company on an application by SteelGrey
to the state Division of Property Management
and Construction for approval to work on
state contracts. The DPMC approved the application,
and SteelGrey was awarded seven contracts
worth approximately $153,000.
On
Jan. 14, Kennedy, 47, of Red Bank, pleaded
guilty before Judge Kreizman to a second-degree
charge of conspiracy to commit various crimes,
including official misconduct, bribery,
money laundering, theft by deception, making
false representations for government contracts,
and use of a corporation for the furtherance
of a criminal object.
The
state will recommend that Kennedy be sentenced
to seven years in state prison. He must
disgorge $80,000 in kickbacks he received
and pay a fine in an amount to be set by
the judge. He will be permanently barred
from public employment in New Jersey.
The
charges against Stermer and Kennedy were
contained in an April 2, 2008 indictment.
In
pleading guilty, Kennedy admitted that between
December 2002 and March 2006, he steered
more than $630,000 in state contracts to
three companies that were owned by friends,
including SteelGrey. As Assistant Director
of the DOC Division of Operations, in charge
of the Capital Planning & Construction
Unit, Kennedy had control over soliciting
bids and selecting contractors for small
capital projects costing under $41,100.
Kennedy
admitted that he steered approximately $153,000
in state contracts to SteelGrey. Kennedy
and Stermer are friends.
Kennedy
also admitted that he steered state contracts
totaling approximately $348,000 to Pro General
Contracting Inc., aka Pro Painting &
General Contracting Inc. Another defendant
in the case, Jasher Guerrero Ramos, was
listed in corporate records as owner of
Pro Painting, but Kennedy actually controlled
the company. Kennedy admitted he received
approximately $40,000 in kickbacks on those
contracts with the help of Guerrero Ramos
and another man, Ronald Hayes. Both Guerrero
Ramos and Hayes have pleaded guilty in the
scheme.
Finally,
Kennedy admitted that he received more than
$34,000 in kickbacks on state contracts
totaling $128,850 that he awarded to SBC
Construction Inc., the company of another
friend, Alfred “Buddy” Canale.
Canale has also pleaded guilty.
Although
Kennedy was required to seek bids from at
least three pre-qualified contractors, he
frequently solicited bids exclusively from
the companies he and his friends controlled,
and he often dictated the amount of each
bid so he could award the contract as he
desired. The contracts were for masonry,
painting, "skirting" of a trailer,
roofing repairs and other general projects.
The
Department of Corrections reported suspected
irregularities in the bidding process on
small capital projects to the Division of
Criminal Justice in early 2006.
Guerrero
Ramos pleaded guilty on Dec. 14, 2009 to
bribery, a second-degree crime. The state
will recommend that he be sentenced to five
years in state prison. Canale pleaded guilty
to bribery on Dec. 21, 2007. The state will
recommend that he be sentenced to three
years in prison. Hayes pleaded guilty on
Nov. 26, 2007 to a third-degree charge of
offering an unlawful benefit to a public
servant for official behavior. Another man,
Delfim Rodrigues, pleaded guilty on Feb.
28, 2008 to the same charge as Hayes. Rodrigues’
company, DEL ROD Inc., was a subcontractor
on the SBC Construction contracts, and Rodrigues
admitted providing kickbacks to Kennedy.
The state will recommend that Hayes and
Rodrigues be sentenced to probation.
Deputy
Attorneys General Pearl Minato and Steven
J. Zweig are prosecuting the case. Deputy
Attorney General Zweig represented the Division
of Criminal Justice at today’s sentencing.
The investigation was conducted and coordinated
by Lt. Keith Lerner, Detective Paul Marfino
and Deputy Attorney General Zweig of the
Division of Criminal Justice Corruption
Bureau, assisted by Senior Investigator
Manuel Alfonso of the Department of Corrections,
Special Investigations Division, who was
sworn in as a special investigator for the
Division of Criminal Justice.
Director
Taylor noted that the Division of Criminal
Justice Corruption Bureau has established
a toll-free Corruption Tipline 1-866-TIPS-4CJ.
The public can also log on to the Division’s
Web site www.njdcj.org
to confidentially report suspected wrongdoing.
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