TRENTON – Attorney General Jeffrey S. Chiesa announced that the former Director of the New Jersey Division of Taxation and an Assistant Deputy Director were convicted today following a bench trial of official misconduct for accepting gifts from a collections company, OSI Collections Services Inc., while continuing to take action on the company’s contracts with the state to collect unpaid taxes.  The state’s investigation revealed that the two men accepted dinners, entertainment and golf outings worth thousands of dollars from the company.

Robert K. Thompson, 63, of Hamilton, former Director of the Division of Taxation, and David M. Gavin, 60, of Titusville, former Assistant Deputy Director for Contract Compliance, were found guilty today by Superior Court Judge Andrew J. Smithson. Thompson was found guilty of one count of third-degree official misconduct, and Gavin was found guilty of two counts of third-degree official misconduct and one count of third-degree pattern of official misconduct. Judge Smithson’s verdicts followed an 18-day bench trial in Trenton.  Testimony was completed on June 14 and oral summations were given on July 24. Deputy Attorneys General Thomas Clark and Phillip Leahy tried the case for the Division of Criminal Justice Corruption Bureau.

“This verdict lets the taxpayers of New Jersey know that we’re not going to tolerate government officials who break the law and use their offices for their own selfish interests, rather than strictly serving the public’s interest as required,” said Attorney General Chiesa. “These two officials accepted expensive gifts from a vendor they had a duty to oversee, and they continued to take actions regarding the vendor’s lucrative contracts despite the obvious conflict of interest.  We need to eliminate this type of corruption from government.” 

 “Taxpayers must foot the bill for hundreds of millions of dollars in government contracts each year in New Jersey,” said Director Stephen J. Taylor of the Division of Criminal Justice. “That’s why it is vital that the public officials who administer those contracts be free from any improper influence.  When they develop self-serving relationships with contractors, as these defendants did, it undermines public confidence in the integrity of the contracting process.”

The two defendants have been suspended without pay since being charged by the Division of Criminal Justice in 2006.  The defendants were indicted on charges of second-degree official misconduct, but Judge Smithson ruled that it was not clear whether the gifts that were accepted by the defendants met the threshold for second-degree official misconduct. He therefore found them guilty of third-degree official misconduct.

Under state law, third-degree crimes carry a potential sentence of three to five years in state prison and a fine of up to $15,000. However, there is a presumption against imprisonment for a defendant who has no prior criminal convictions. That means that there is a presumption of a sentence of probation, but the presumption does allow for a county jail term – as opposed to a state prison term – of up to 364 days, as a condition of probation.  Neither Thompson nor Gavin has any prior criminal conviction.

Both men will be required to forfeit their jobs and will be permanently barred from public employment in New Jersey. Notice of their convictions will be provided to the Pension Board for any action deemed appropriate.

Thompson and Gavin had direct responsibility for overseeing OSI’s performance under its contracts with the state to collect unpaid income and business taxes.  The state presented testimony and evidence that, despite that responsibility, they accepted numerous expensive gifts from OSI, which they failed to report to the department’s ethics officer as required. Those gifts included:

• A Sept. 21, 2004 trip to New York City for Robert Thompson and his wife, valued at about $2,357, including limo service to the city, tickets to the Broadway musical "Wicked," and meals and drinks at two restaurants.
• Two separate golf outings for Gavin in June 2001 and June 2002, collectively valued at more than $1,000.  He also received a certificate worth $200 at a golf club.
• In addition, Thompson and Gavin each received meals and/or drinks from OSI employees on various occasions, together or separately, at different restaurants in New Jersey, between 2000 and 2004.

Judge Smithson found by his verdicts that each man continued to take actions with respect to OSI’s contracts, despite the fact that he had received certain gifts from OSI and had an obligation to recuse himself or refrain from taking action on the contracts in light of the apparent conflict of interest.

In convicting Thompson of one count of official misconduct, Judge Smithson found that he participated, despite the apparent conflict of interest, in a decision in July and August of 2005 regarding the length of the extension of one of OSI’s contracts, recommending a six-month extension rather than the three-month extension initially proposed.

In convicting Gavin of official misconduct, Judge Smithson found that he participated, despite the apparent conflict of interest, in the appointment in May 2004 of four members of a committee responsible for evaluating vendors during the rebidding of one of OSI’s contracts.  The judge convicted him of the second count of official misconduct for participating in early 2004 in the formulation of a request for proposals for the rebidding of one of OSI’s contracts, despite the apparent conflict of interest.

The investigations were conducted and coordinated by Detective Benjamin Kukis, Deputy Attorney General Clark, and former Deputy Attorney General Steven J. Zweig of the Division of Criminal Justice Corruption Bureau.  Deputy Attorneys General Clark and Leahy were assisted at trial by Auditor Catherine Lodato and Analyst Nathalie Kurzawa.

On March 8, 2010, the former sales director of OSI, Sandra Bielanski, 45, of Hillsborough, pleaded guilty to charges that she offered an illegal gift to a state official and concealed the fact that OSI was overbilling the state.  She pleaded guilty to third-degree charges of offering an unlawful benefit to a public servant for official behavior and tampering with public records or information.  She is awaiting sentencing.  Bielanski admitted that she arranged the trip for Robert Thompson and his wife to see “Wicked” in New York at OSI’s expense.  She also admitted that she learned OSI was improperly billing the state, but took steps to conceal it from state officials.

Two other OSI employees, Enos “George” Blake, 65, of Kendall Park, and Carol Labbe, 45, of Jackson, were indicted in connection with the improper bills.  It is alleged that Blake, as the OSI vice president responsible for managing state projects, and Labbe, as his de facto second in command, purposely submitted improper bills between January 1999 and May 2005 that caused the state to overpay OSI by $1,184,662.  The charges against Blake and Labbe are pending.  They are merely accusations and the defendants are presumed innocent until proven guilty.

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