LOCAL MEN FACE PRISON FOR PRISON SCAM

call-in-the-authoritiesA Red Bank man appears headed into the state prison system he admitted scamming out of $153,000, the New Jersey Attorney General‘s office announced yesterday.

Mark Stermer, 43, pleaded guilty Tuesday before state Superior Court Judge Ira E. Kreizman in Freehold to making false representations in connection with state contracts awarded by another man identified as a Red Banker, former state Department of Corrections administrator Gerald T. Kennedy.

Kennedy, also of Red Bank,  pleaded guilty last month to orchestrating a wide-ranging bid rigging and kickback scheme that steered some $630,000 in state business to friends.

Stermer, 43, and his company, SteelGrey  LLC, each pleaded guilty to a second-degree charge of making false representations for government contracts.

From a press release issued by the AG’s office yesterday:

In pleading guilty, Stermer admitted that he submitted a fraudulent financial statement and false information about past projects of the company on an application by SteelGrey to the state Division of Property Management and Construction for approval to work on state contracts. The DPMC approved the application, and SteelGrey was awarded seven contracts worth approximately $153,000.

Under the plea agreement, the state will recommend that Stermer be sentenced to three years in state prison. He and his company will be barred from doing business with the state for 10 years.

Deputy Attorney General Pearl Minato took the guilty plea for the Division of Criminal Justice Corruption Bureau. Judge Kreizman scheduled sentencing for Stermer and SteelGrey for April 9.

On Jan. 14, Kennedy, 47, of Red Bank, pleaded guilty before Judge Kreizman to a second-degree charge of conspiracy to commit various crimes, including official misconduct, bribery, money laundering, theft by deception, making false representations for government contracts, and use of a corporation for the furtherance of a criminal object.

The state will recommend that Kennedy be sentenced to seven years in state prison. He must disgorge $80,000 in kickbacks he received and pay a fine in an amount to be set by the judge. He will be permanently barred from public employment in New Jersey.

The charges against Stermer and Kennedy were contained in an April 2, 2008 indictment.

In pleading guilty, Kennedy admitted that between December 2002 and March 2006, he steered more than $630,000 in state contracts to three companies that were owned by friends, including SteelGrey. As Assistant Director of the DOC Division of Operations, in charge of the Capital Planning & Construction Unit, Kennedy had control over soliciting bids and selecting contractors for small capital projects costing under $41,100.

Kennedy admitted that he steered approximately $153,000 in state contracts to SteelGrey. Kennedy and Stermer are friends.

Kennedy also admitted that he steered state contracts totaling approximately $348,000 to Pro General Contracting Inc., aka Pro Painting & General Contracting Inc. Another defendant in the case, Jasher Guerrero Ramos, was listed in corporate records as owner of Pro Painting, but Kennedy actually controlled the company. Kennedy admitted he received approximately $40,000 in kickbacks on those contracts with the help of Guerrero Ramos and another man, Ronald Hayes. Both Guerrero Ramos and Hayes have pleaded guilty in the scheme.

Finally, Kennedy admitted that he received more than $34,000 in kickbacks on state contracts totaling $128,850 that he awarded to SBC Construction Inc., the company of another friend, Alfred “Buddy” Canale. Canale has also pleaded guilty.

Although Kennedy was required to seek bids from at least three pre-qualified contractors, he frequently solicited bids exclusively from the companies he and his friends controlled, and he often dictated the amount of each bid so he could award the contract as he desired. The contracts were for masonry, painting, “skirting” of a trailer, roofing repairs and other general projects.

The Department of Corrections reported suspected irregularities in the bidding process on small capital projects to the Division of Criminal Justice in early 2006.

Guerrero Ramos pleaded guilty on Dec. 14, 2009 to bribery, a second-degree crime. The state will recommend that he be sentenced to five years in state prison. Canale pleaded guilty to bribery on Dec. 21, 2007. The state will recommend that he be sentenced to three years in prison. Hayes pleaded guilty on Nov. 26, 2007 to a third-degree charge of offering an unlawful benefit to a public servant for official behavior. Another man, Delfim Rodrigues, pleaded guilty on Feb. 28, 2008 to the same charge as Hayes. Rodrigues’ company, DEL ROD Inc., was a subcontractor on the SBC Construction contracts, and Rodrigues admitted providing kickbacks to Kennedy. The state will recommend that Hayes and Rodrigues be sentenced to probation.

Deputy Attorneys General Steven J. Zweig and Pearl Minato are prosecuting the case. The investigation was conducted and coordinated by Lt. Keith Lerner, Detective Paul Marfino and Deputy Attorney General Zweig of the Division of Criminal Justice Corruption Bureau, assisted by Senior Investigator Manuel Alfonso of the Department of Corrections, Special Investigations Division, who was sworn in as a special investigator for the Division of Criminal Justice.

Director Taylor noted that the Division of Criminal Justice Corruption Bureau has established a toll-free Corruption Tipline 1-866-TIPS-4CJ. The public can also log on to the Division’s Web site www.njdcj.org to confidentially report suspected wrongdoing.