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TRENTON – Attorney
General Paula T. Dow and Criminal Justice
Director Stephen J. Taylor announced that
an alarm system contractor from Collingswood
was sentenced to jail today for rigging
bids for contracts with the New Jersey Department
of Corrections and the Haddon Township Board
of Education.
According to Director Taylor,
Paul Kerth, 59, of Collingswood, was sentenced
to 364 days in the county jail as a condition
of five years of probation by Superior Court
Judge Irvin J. Snyder in Camden County.
Kerth and three companies he owns –
Independent Alarm Distributors, Inc., Adirondack
Alarm, and Automatic Alarm Associates –
pleaded guilty on Sept. 29, 2009 to third-degree
theft by deception.
Kerth and his three companies
will be barred from all public contracts
in New Jersey for a period of five years
and must pay $150,000 in restitution into
the state’s Anti-Trust Revolving Fund
for anti-trust enforcement efforts. Deputy
Attorney General Steven J. Zweig took the
guilty plea for the Division of Criminal
Justice Corruption Bureau and represented
the state at the sentencing.
Kerth was named in a Jan.
14, 2009 state grand jury indictment, which
also charged Frederick J. Armstrong, 60,
of Pemberton Borough, a construction management
specialist in the Capital Planning &
Construction Unit of the Department of Corrections
(DOC). Armstrong assisted Kerth in submitting
rigged bids to the DOC and used his influence
over contracting procedures to steer contracts
awarded by the department to Independent
Alarm.
An investigation by the
DOC Special Investigations Division and
the Division of Criminal Justice Corruption
Bureau revealed that between April 1999
and December 2004, Kerth and his companies,
with Armstrong’s assistance, rigged
nine DOC contracts with contract prices
that, in the aggregate, exceeded $230,000.
Armstrong pleaded guilty
on March 29 to a single charge of conspiracy
to commit the crimes of official misconduct,
unlawful restraint of trade, theft by deception,
making false representations for government
contracts, and misconduct by a corporate
official. Judge Snyder sentenced Armstrong
to three years in state prison on June 18.
Armstrong was required to forfeit his job
with the DOC and will be permanently excluded
from public employment in New Jersey.
In pleading guilty, Kerth
admitted that, at Armstrong’s request,
he solicited other contractors to submit
higher “cover” bids so Independent
Alarm would win a 2003 contract with the
Department of Corrections for $39,600 to
install closed-circuit television components
at Mid-State Correctional Facility. Under
state law, Independent had to be the lowest
qualified bidder among at least three independent
bids to win the contract.
Kerth further admitted that
Automatic Alarm submitted a cover bid so
that Independent Alarm would win a 2002
contract for $5,030 to install upgraded
alarm systems in two schools in Haddon Township.
The investigation was conducted
and coordinated for the Division of Criminal
Justice Corruption Bureau by Lt. Keith Lerner,
Detective Paul Marfino Jr., Detective David
Patella and Deputy Attorney General Zweig.
Senior Investigators Manuel Alfonso and
Charles Walters conducted the investigation
for the Department of Corrections Special
Investigations Division.
Attorney General Dow thanked
the Department of Corrections for its referral
and extensive assistance in the investigation.
Director
Taylor 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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