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TRENTON
– Attorney General Anne Milgram and
Criminal Justice Director Deborah L. Gramiccioni
announced that former Blairstown Township
Committee member Raymond Davis was sentenced
to state prison 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.
Davis,
59, of Blairstown, was sentenced to three
years in state prison by Superior Court
Judge John H. Pursel in Warren County. Davis
pleaded guilty on Jan. 15 to second-degree
official misconduct. He was ordered 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.
“Mr.
Davis took an oath to serve the residents
of Blairstown with honesty and integrity.
Instead, he stole from them,” said
Attorney General Milgram. “We will
hold accountable public officials who break
the law and steal from the public.”
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. ***** ]
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 III of the New Jersey
State Police Official Corruption Bureau,
Detective Timothy Herron of the Division
of Criminal Justice Corruption Bureau, and
Sgt. Stephen Losey of the Blairstown Police
Department. It was prosecuted by Deputy
Attorney General Perry Primavera.
“New
Jersey’s municipalities spend millions
of taxpayer dollars each year on public
contracts,” said Director Gramiccioni.
“With this sentence, we send a message
that we will vigorously prosecute any public
official who corrupts the contracting process
for personal profit.”
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 has established
a toll-free Corruption Tipline 1-866-TIPS-4CJ
for the public to confidentially report
corruption, financial crime and other illegal
activities.
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