| TRENTON
– Attorney General Zulima V. Farber
today announced the indictment of a contracting
company and its owner for alleged theft,
corporate misconduct, money laundering and
other charges in connection with their failure
to pay subcontractors nearly $1.5 million
for school construction projects involving
the Montville, Demarest and Watchung districts.
According to Office of Government Integrity
Acting Director Tracy M. Thompson, The Megan
Group Inc. and its sole owner and president,
George Rullo, 44, of Beacon Hill Road, Morganville,
N.J., were indicted late Friday by a state
grand jury.
The
state grand jury indictment, which stemmed
from an investigation by the Office of Government
Integrity, alleges that between July 2002
and December 2003, Megan Group and Rullo
falsely certified to the Montville, Demarest
and Watchung school districts that they
had paid certain subcontractors who, in
fact, had not been paid for their work on
the projects. The projects were funded in
part by the New Jersey Schools Construction
Corporation. It is alleged that the defendants
received a total of $1,486,325 in contract
payments for work performed by six subcontractors,
but never paid the money to the subcontractors.
“We
are making it a priority to target fraud
and waste in New Jersey’s school construction
program,” said Attorney General Farber.
“We will not tolerate contractors
who break the law.”
The
investigation revealed a pattern of conduct
in which the defendants allegedly received
and retained contract payments that they
were obligated to promptly pay to subcontractors.
In order to obtain additional payments,
the defendants allegedly submitted documents
falsely certifying that they were up to
date in paying their subcontractors.
The
indictment, which was handed up to Superior
Court Judge Charles A. Delehey in Mercer
County, charges the two defendants with
money laundering, a first-degree crime;
three counts of making false payment claims
for a government contract, a second-degree
crime; three counts of making false representations
for a government contract, a second-degree
crime; theft by failure to make a required
disposition of property received, a second-degree
crime; misapplication of entrusted property,
a second-degree crime; and, with respect
to Rullo, misconduct by a corporate official,
a second-degree crime.
Crimes
of the first degree carry sentences of up
to 20 years in state prison and a criminal
fine of up to $200,000; crimes of the second
degree carry sentences of up to 10 years
in state prison and a criminal fine of up
to $150,000; and crimes of the third degree
carry sentences of up to 5 years in state
prison and a criminal fine of up to $15,000.
The indictment is merely an accusation and
the defendants are presumed innocent until
proven guilty.
The
case was presented to the state grand jury
by Deputy Attorney General Daniel Dryzga.
The investigation was led by State Investigator
David Salzmann with assistance by Special
Investigator Lee Wittig.
>>
View Indictment
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