Two men identified as Red Bank residents were arraigned in Freehold yesterday on charges arising from an alleged bid-rigging scheme centered on the state prison system, where one of them was employed, today’s Star-Ledger reports.

Gerald Kennedy and Mark Sterner both pleaded not guilty. Three other men have pleaded guilty in the case, the Sledger says.

From the article:

Kennedy, a 46-year-old Red Bank resident, was assistant director of the state Corrections Department’s operations division. As head of the capital planning and construction unit, Kennedy had control over bid solicitations and contractor selection for projects costing less than $41,000, duties authorities said he exploited for his own enrichment.

Suspended without pay since November, Kennedy is charged with official misconduct, a pattern of official misconduct, bribery, money laundering, theft by deception, contract fraud, misconduct by a corporate official and conspiracy

He is accused of steering $348,000 in contracts to a company he secretly owned, Pro Painting and General Contracting, between 2003 and 2005, and with taking kickbacks for those contracts, according to the indictment.

Kennedy, arrested April 3, also is accused of steering another $160,000 in contracts to his friend Mark Stermer, 41, of Red Bank, and Stermer’s company, SteelGray LLC.

Stermer is charged with official misconduct, theft by deception, contract fraud, misconduct by a corporate official and conspiracy. Kennedy and Stermer could face at least 10 years in prison.

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