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TRENTON
– Attorney General Anne Milgram announced
that two contractors have pleaded guilty
to offering bribes to former Irvington Mayor
Michael Steele in his job as business administrator
for the Irvington Board of Education. Steele
was indicted in June on official misconduct
and bribery charges for allegedly taking
at least $120,000 in kickbacks for rigging
school district contracts.
Preston
Lewis, 53, of Dingmans Ferry, Pa., pleaded
guilty today before Superior Court Judge
Michael A. Petrolle in Essex County to an
accusation charging him with third-degree
offer of unlawful benefit to a public servant
for official behavior. On Aug. 14, William
Hardy, 55, of Margate, Fla., pleaded guilty
before Judge Petrolle to the same charge.
Under
their plea agreements, each man faces three
years of probation and a $5,000 fine. They
also will be barred from government contracts
in New Jersey for five years. Deputy Attorney
General Erik Daab took the pleas for the
Division of Criminal Justice Corruption
Bureau.
An
investigation by the Division of Criminal
Justice Corruption Bureau and the State
Police Official Corruption Unit revealed
that Steele, 52, of Easton, Pa., engaged
in two separate bid-rigging and kickback
schemes between 2003 and 2007 involving
the two contractors and approximately $1.4
million in contracts. In pleading guilty,
the two contractors admitted that they provided
bribes to Steele in connection with the
schemes.
“These
guilty pleas represent significant steps
forward in our prosecution of this public
corruption case, in which Mr. Steele is
charged with taking at least $120,000 in
bribes at the expense of a struggling school
district and the state and local taxpayers
who support it,” Attorney General
Milgram said.
Steele,
who retired from the district in April,
allegedly received kickbacks totaling $120,000
from Hardy’s Florida-based maintenance
supplies company, WH Chemical Group Inc.,
in return for ordering supplies for the
district. Steele allegedly falsified purchase
orders, overstating the quantity of supplies
that were provided in order to make it appear
that the company offered the best prices.
WH Chemical Group received approximately
$900,000 in district contracts.
In
the second scheme, Steele allegedly rigged
bids to award contracts to Lewis, a Lakewood-based
contractor who owned Lone Star Consulting,
a construction company, and BMG Security,
a security camera installation company.
Steele allegedly rigged bids on at least
29 school contracts involving those companies
and inflated the contract prices to build
in thousands of dollars in kickbacks for
himself.
The
Division of Criminal Justice obtained a
nine-count state grand jury indictment on
June 5 charging Steele with two counts of
second-degree official misconduct, two counts
of second-degree pattern of official misconduct,
two counts of second-degree bribery, two
counts of second-degree acceptance or receipt
of unlawful benefit by a public servant
for official behavior, and one count of
second-degree conspiracy.
Each
count of the indictment carries a maximum
sentence of 10 years in state prison with
a mandatory minimum of five years upon conviction.
The mandatory minimum was established under
a new law signed by Governor Jon S. Corzine
in March 2007 that significantly enhances
the punishment of government officials who
are convicted of abusing their office and
violating the public trust. Second-degree
offenses also carry a criminal fine of up
to $150,000. The indictment is merely an
accusation and the defendant is presumed
innocent until proven guilty.
The
investigation was conducted and coordinated
by Detective Kiersten Pentony, Detective
Robyn Greene, Sgt. Harry Maronpot Jr., and
Deputy Attorney General Daab of the Division
of Criminal Justice Corruption Bureau, and
Detective Sgt. Geoffrey P. Forker, Detective
Sgt. 1st Class Joseph Celli III and Detective
Sgt. 1st Class Thomas T. Goletz of the New
Jersey State Police Official Corruption
Unit. Deputy Attorney General Daab presented
the case to the state grand jury. The state
Department of Education assisted in the
investigation.
The
investigation revealed that Steele, whose
annual salary was $120,000, would purchase
maintenance supplies for the district –
including such items as cleaning chemicals,
asphalt repair compounds and salt for melting
snow – from WH Chemical Group in Margate,
Florida, and the company allegedly would
pay Steele a “bonus” of between
$5,000 and $20,000 per order. The indictment
details 17 payments totaling $120,000 between
Dec. 31, 2003 and Oct. 15, 2007.
Steele
allegedly would call Hardy and ask him the
quantity of products he needed to buy to
get a kickback in a particular amount. It
is alleged that Steele would then order
supplies in the quantities stated by Hardy,
and Hardy would send the kickback to Steele.
While WH Chemical Group would provide the
agreed upon quantities of supplies to the
district, Steele allegedly created false
purchase orders that inflated the quantities.
WH Chemical Company could not match the
prices offered by competitors, so Steele
allegedly made it appear that the company
was providing more supplies to beat the
other bids.
In
the second scheme, Steele allegedly would
contact Lewis about school district projects
and instruct him to prepare a cost estimate.
It is alleged that Steele would then tell
Lewis to inflate the estimate to include
a kickback and submit the inflated bid to
the school district. Steele or Lewis would
prepare two fraudulent competing bids for
the project in higher amounts. Because Lewis’s
company always had the lowest bid, the Board
of Education would award his company the
contract. After he completed the work and
received a check from the school district,
he allegedly would meet with Steele to provide
the kickback in cash. The indictment identifies
29 contracts with Lewis’s companies
between January 2003 and December 2007 where
Steele allegedly rigged the bids and negotiated
kickbacks.
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