A blog about living in Aberdeen, New Jersey.

Saturday, March 12, 2011

2 Local Construction Contractors Arrested

A couple of contractors from the Old Bridge section of Cliffwood Beach have been arrested and charged with making false contract payment claims while doing business with the Westfield and Scotch Plains-Fanwood school districts, according to the NJ Attorney General's Office.

School District Engineer and Three Contractors Charged with Bid Rigging, Inflating School Contracts and Illegal Kickbacks
Westfield School District Business Administrator charged with taking bribes from contractor

TRENTON – Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced that an engineer who oversaw construction projects for three school districts was charged today with taking thousands of dollars in kickbacks on contracts he recommended that allegedly involved rigged bids and fraudulently inflated costs. The business administrator for the Westfield School District and three contractors were also charged today.

According to Director Taylor, Kenneth Disko, 47, of Mountainside, allegedly orchestrated a series of bid-rigging and kickback schemes from 2001 to 2010 as the contracted engineer or engineer/architect on record for the Westfield, Tinton Falls and Scotch Plains-Fanwood school districts. He was charged with second-degree making false contract payment claims.

It is alleged that Disko knowingly prepared fraudulent quotes and estimates in connection with school district contracts, and directed contractors to inflate quotes and estimates. He allegedly submitted those quotes and estimates to the three school districts and recommended approval of the fraudulently bid contracts in exchange for more than $80,000 in kickbacks from contractors. The investigation by the Division of Criminal Justice Corruption Bureau is continuing.

Three contractors were charged with making false contract payment claims (2nd degree):

* John Sangiuliano, 56, of Scotch Plains, co-owner of Metropolitan Metal Window Company;
* Martin W. Starr, 44, of Cliffwood Beach, owner of Starr Contracting; and
* Stephen M. Gallagher, 50, of Cliffwood Beach, owner of East Commercial Construction and Tara Construction.

In addition, Westfield School District Business Administrator and Board Secretary Robert A. Berman, 55, of South Plainfield, was charged with second-degree bribery for allegedly accepting over $13,000 worth of window glass and doors installed at his home by Metropolitan from 2004 to 2008, in return for making written recommendations that the Westfield Board of Education appoint Metropolitan as the district’s “contractor of record.”

“We allege that this engineer corrupted the contracting process in three school districts where he worked, taking more than $80,000 in kickbacks from contractors who overcharged the districts for school repairs and renovations,” said Attorney General Dow. “These defendants allegedly cheated the taxpayers who fund these districts, as well as the students who might have benefited from the thousands of dollars that were misappropriated.”

“We charge that the business administrator for the Westfield School District accepted expensive home repairs, free of charge, from a company that he repeatedly recommended for a lucrative appointment as the district’s contractor of record,” said Director Taylor. “We will not tolerate this type of illegal, self-serving conduct by public officials.”

The investigation was conducted and coordinated for the Division of Criminal Justice by Sgt. Lisa Shea, Detective Michael Behar and Deputy Attorney General Vincent J. Militello.

It is alleged that, in bidding on contracts for the Westfield and Tinton Falls school districts, Sangiuliano, at Disko’s direction, knowingly prepared fraudulent quotes bearing the names of other legitimate contractors, making the quotes higher than his own. He submitted the quotes to Disko, who recommended that the contracts be awarded to Sangiuliano’s company, Metropolitan. It is also alleged that, at the direction of Disko, Sangiuliano knowingly inflated Metropolitan’s quotes and the cost of repairs for the contracts. In exchange for the inflated contracts, Sangiuliano allegedly gave kickbacks to Disko in excess of $36,000 in 2009 and 2010. It is alleged that Disko also received more than $44,000 in kickbacks from a prior owner of Metropolitan who is now deceased for contracts awarded to Metropolitan from 2001 to 2004.

In bidding one contract in the Westfield schools, Disko allegedly told Sangiuliano he would include the replacement of seven windows in the scope of work for the bidding specifications, even though those seven windows had been recently replaced by Sangiuliano. This allegedly enabled Sangiuliano to bid lower than other contractors, knowing he would not have to replace the windows. Sangiuliano was awarded the job. He allegedly also kept an additional $18,000 in “bid allowances” for unforeseen work that was approved by Disko as the architect/engineer of record. Sangiuliano, in fact, did not perform any unforeseen or additional work on the project.

It is further alleged that between 2004 and 2008, Sangiuliano installed free window glass and doors, valued at over $13,000, in Berman’s home in exchange for Berman’s recommendation of Metropolitan as contractor of record for the Westfield School District. The contractor of record is contracted on an ongoing basis to handle school repairs and construction projects that arise.

The charge against Starr involves contracts worth approximately $39,530 that were awarded to Starr Contracting by the Westfield and Scotch Plains-Fanwood districts. In 2009 and 2010, Starr allegedly prepared fictitious quotes from legitimate contractors without their permission and submitted them to Disko in order to appear to be the lowest bidder for the contracts.

It is alleged that Gallagher helped Starr to obtain those contracts in the Westfield and Scotch Plains-Fanwood districts by preparing fraudulent and fictitious quotes and estimates for his own companies and submitting them to Disko as higher bids than those submitted by Starr. Also, in connection with other contracts that were awarded to Gallagher’s companies in the Westfield and Scotch Plains-Fanwood districts, Gallagher allegedly inflated quotes and the cost of work performed. In return for the inflated contracts, Gallagher allegedly gave cash kickbacks to Disko.

Starr and Gallagher were arrested this morning on complaint-warrants by detectives from the Division of Criminal Justice. They were lodged in the Union County Jail with bail set for each at $50,000. Disko, Sangiuliano and Berman were charged by complaint-summonses. Second-degree charges carry a maximum sentence of 10 years in state prison and a criminal fine of $150,000. The charges are merely accusations and the defendants are presumed innocent until proven guilty. The charges will be presented to a state grand jury for potential indictment.


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