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TRENTON
– Attorney General Paula T. Dow and
Criminal Justice Director Stephen J. Taylor
announced that an engineer who oversaw construction
projects for three school districts was
charged today with taking thousands of dollars
in kickbacks on contracts he recommended
that allegedly involved rigged bids and
fraudulently inflated costs. The business
administrator for the Westfield School District
and three contractors were also charged
today.
According
to Director Taylor, Kenneth Disko, 47, of
Mountainside, allegedly orchestrated a series
of bid-rigging and kickback schemes from
2001 to 2010 as the contracted engineer
or engineer/architect on record for the
Westfield, Tinton Falls and Scotch Plains-Fanwood
school districts. He was charged with second-degree
making false contract payment claims.
It
is alleged that Disko knowingly prepared
fraudulent quotes and estimates in connection
with school district contracts, and directed
contractors to inflate quotes and estimates.
He allegedly submitted those quotes and
estimates to the three school districts
and recommended approval of the fraudulently
bid contracts in exchange for more than
$80,000 in kickbacks from contractors. The
investigation by the Division of Criminal
Justice Corruption Bureau is continuing.
Three
contractors were charged with making false
contract payment claims (2nd degree):
- John
Sangiuliano, 56, of Scotch Plains,
co-owner of Metropolitan Metal Window
Company;
- Martin
W. Starr, 44, of Cliffwood Beach,
owner of Starr Contracting; and
- Stephen
M. Gallagher,
50, of Cliffwood Beach, owner of East
Commercial Construction and Tara Construction.
In
addition, Westfield School District Business
Administrator and Board Secretary Robert
A. Berman, 55, of South Plainfield, was
charged with second-degree bribery for allegedly
accepting over $13,000 worth of window glass
and doors installed at his home by Metropolitan
from 2004 to 2008, in return for making
written recommendations that the Westfield
Board of Education appoint Metropolitan
as the district’s “contractor
of record.”
“We
allege that this engineer corrupted the
contracting process in three school districts
where he worked, taking more than $80,000
in kickbacks from contractors who overcharged
the districts for school repairs and renovations,”
said Attorney General Dow. “These
defendants allegedly cheated the taxpayers
who fund these districts, as well as the
students who might have benefited from the
thousands of dollars that were misappropriated.”
“We
charge that the business administrator for
the Westfield School District accepted expensive
home repairs, free of charge, from a company
that he repeatedly recommended for a lucrative
appointment as the district’s contractor
of record,” said Director Taylor.
“We will not tolerate this type of
illegal, self-serving conduct by public
officials.”
The
investigation was conducted and coordinated
for the Division of Criminal Justice by
Sgt. Lisa Shea, Detective Michael Behar
and Deputy Attorney General Vincent J. Militello.
It
is alleged that, in bidding on contracts
for the Westfield and Tinton Falls school
districts, Sangiuliano, at Disko’s
direction, knowingly prepared fraudulent
quotes bearing the names of other legitimate
contractors, making the quotes higher than
his own. He submitted the quotes to Disko,
who recommended that the contracts be awarded
to Sangiuliano’s company, Metropolitan.
It is also alleged that, at the direction
of Disko, Sangiuliano knowingly inflated
Metropolitan’s quotes and the cost
of repairs for the contracts. In exchange
for the inflated contracts, Sangiuliano
allegedly gave kickbacks to Disko in excess
of $36,000 in 2009 and 2010. It is alleged
that Disko also received more than $44,000
in kickbacks from a prior owner of Metropolitan
who is now deceased for contracts awarded
to Metropolitan from 2001 to 2004.
In
bidding one contract in the Westfield schools,
Disko allegedly told Sangiuliano he would
include the replacement of seven windows
in the scope of work for the bidding specifications,
even though those seven windows had been
recently replaced by Sangiuliano. This allegedly
enabled Sangiuliano to bid lower than other
contractors, knowing he would not have to
replace the windows. Sangiuliano was awarded
the job. He allegedly also kept an additional
$18,000 in “bid allowances”
for unforeseen work that was approved by
Disko as the architect/engineer of record.
Sangiuliano, in fact, did not perform any
unforeseen or additional work on the project.
It
is further alleged that between 2004 and
2008, Sangiuliano installed free window
glass and doors, valued at over $13,000,
in Berman’s home in exchange for Berman’s
recommendation of Metropolitan as contractor
of record for the Westfield School District.
The contractor of record is contracted on
an ongoing basis to handle school repairs
and construction projects that arise.
The
charge against Starr involves contracts
worth approximately $39,530 that were awarded
to Starr Contracting by the Westfield and
Scotch Plains-Fanwood districts. In 2009
and 2010, Starr allegedly prepared fictitious
quotes from legitimate contractors without
their permission and submitted them to Disko
in order to appear to be the lowest bidder
for the contracts.
It
is alleged that Gallagher helped Starr to
obtain those contracts in the Westfield
and Scotch Plains-Fanwood districts by preparing
fraudulent and fictitious quotes and estimates
for his own companies and submitting them
to Disko as higher bids than those submitted
by Starr. Also, in connection with other
contracts that were awarded to Gallagher’s
companies in the Westfield and Scotch Plains-Fanwood
districts, Gallagher allegedly inflated
quotes and the cost of work performed. In
return for the inflated contracts, Gallagher
allegedly gave cash kickbacks to Disko.
Starr
and Gallagher were arrested this morning
on complaint-warrants by detectives from
the Division of Criminal Justice. They were
lodged in the Union County Jail with bail
set for each at $50,000. Disko, Sangiuliano
and Berman were charged by complaint-summonses.
Second-degree charges carry a maximum sentence
of 10 years in state prison and a criminal
fine of $150,000. The charges are merely
accusations and the defendants are presumed
innocent until proven guilty. The charges
will be presented to a state grand jury
for potential indictment.
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