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TRENTON
– Attorney General Anne Milgram and
Criminal Justice Director Gregory A. Paw
announced that former Blairstown Township
Committee member Raymond Davis pleaded guilty
to official misconduct today for using his
position as chairman of the $2.6 million
municipal complex project to divert more
than $46,000 to a dummy corporation that
he created.
According
to Director Paw, Davis, 58, of Blairstown,
pleaded guilty to an accusation charging
him with second-degree official misconduct
before Superior Court Judge John H. Pursel
in Warren County. Under the plea agreement,
the state will recommend that Davis be sentenced
to five years in state prison. Davis also
is required to pay full restitution.
At
the plea hearing, Davis admitted that he
used his position as chairman of the municipal
complex project in order to divert project
funds to Municipal Service Group Inc., a
dummy corporation he created which had as
its address a Post Office box in Belvidere.
Davis concealed his ownership of Municipal
Service Group, which purportedly provided
subcontracting services on the project but,
in fact, provided little or no services.
In pleading guilty to the accusation, Davis
admitted that he created the company for
the sole purpose of diverting funds from
the project for his personal use. In total,
Davis diverted more than $46,000 in project
monies.
[*****
Note: Davis and the company
he created are not related in any way to
a Colorado corporation named Municipal Services
Group, Inc., which is a public finance firm
that is registered to do business in New
Jersey under registration number 0400142162.
***** ]
“Mr.
Davis brazenly violated the public’s
trust in order to line his own pockets by
diverting funds from a major municipal construction
project that was placed under his stewardship,”
said Attorney General Milgram. “Today’s
guilty plea should send a powerful message
that those who engage in public corruption
in New Jersey will be vigorously investigated
and prosecuted.”
When
Blairstown Committee member Gary Stevens
succeeded Davis as chairman of the municipal
complex project, he began questioning various
transactions because Municipal Service Group
was not an approved subcontractor. Stevens
contacted the Blairstown Police Department.
Stevens later received information that
Davis was somehow connected to Municipal
Service Group Inc. The Warren County Prosecutor’s
Office conducted an initial investigation
before referring the matter to the New Jersey
Division of Criminal Justice.
The
case was investigated by Detective Sgt.
1st Class Joseph Celli of the New Jersey
State Police and State Investigator Timothy
Herron of the Division of Criminal Justice
Corruption Bureau. It was prosecuted by
Deputy Attorney General Perry Primavera,
who took the guilty plea today.
In
June of 2004, a request for bids went out
for the construction of a new municipal
complex for the Township of Blairstown.
A construction contract for approximately
$2.6 million was subsequently awarded to
Horizon Contracting Company, Inc. Additionally,
a contract for $92,000 was awarded to Medina
Consulting to provide construction management
services.
Prior
to the commencement of construction, Davis
was appointed by the Blairstown Township
Committee to the position of chairman of
the project and was responsible for representing
the interest of the township regarding the
project.
The
investigation found that Davis used his
position as chairperson to authorize various
contracts and payments involving Municipal
Service Group. On April 22, 2005, Municipal
Service Group billed Horizon, the general
contractor, $25,000 for “engineering
and testing” services and received
payment by check on June 1, 2005. The state’s
investigation could not identify any services
provided by Municipal Service Group for
the $25,000 fee. Construction managers with
Medina Consulting stated that Davis told
them that Municipal Service Group, which
Davis identified as a local subcontractor,
would be conducting certain township mandated
testing.
In
another instance, Davis solicited a proposal
through Municipal Service Group for installation
of a security system for the new municipal
complex. The contractor, Service Works,
Inc. submitted a proposal for $29,980 on
January 10, 2005. Davis, who signed off
on the proposal, whited out all references
to Service Works Inc, substituting the name
Municipal Service Group Inc. and increasing
the bid to $35,980. He then submitted it
to Horizon. On June 1, 2005, a down payment
of $17,990 was paid by Horizon to Municipal
Service Group. On July 23, 2005, Davis sent
a check to Service Works Inc. for $14,990,
keeping $3,000.
In
addition, Medina Consulting contracted with
Municipal Service Group to provide a “clerk
of the works” project manager, who
was responsible for monitoring the construction
site. The clerk’s responsibilities
included checking the materials arriving
and subcontractors reporting to the site,
as well as ensuring the work being completed
was in compliance with the local building
codes. The investigation revealed that Davis
recommended Municipal Service Group. A personal
friend of Davis actually served as the clerk
of the works. From October 2004 to November
2005, Medina Consulting received checks
from the township totaling approximately
$33,000 which represented approximately
26 weeks of clerk of the works services
at a rate of $1,250 per week. Medina distributed
these monies to Municipal Service Group.
The investigation revealed that Davis’
friend who served as clerk of the works
did, in fact, adequately perform his duties,
but was paid just $500 per week for 30 weeks,
for a total of $15,000. That left approximately
$18,000 for Municipal Service Group, which
was placed in the Municipal Service Group
banking account and subsequently used by
Davis for personal expenses.
After Stevens began questioning transactions
and Davis’ link to Municipal Service
Group, Davis resigned from the township
committee and certain payments made to Municipal
Service Group were returned to Horizon,
including the $25,000 for engineering and
testing services.
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 site will
remain confidential.
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