TOMS RIVER, NJ — Two more former executives of Birdsall Services Group have been sentenced to jail for their roles in a criminal scheme in which more than $1 million in corporate political contributions were illegally made through firm employees to evade New Jersey’s pay-to-play law, the state Attorney General’s Office announced.
Robert Gerard, 56, of Wall, the former chief marketing officer, and James Johnston, 55, of New Brunswick, the former president of Birdsall’s Environmental Services Group, each were sentenced to 270 days in county jail as a condition of a term of two years of probation, Attorney General Christopher Porrino said Friday. They were sentenced Friday by Superior Court Judge James Den Uyl in Ocean County.
The two are among eight former executives, shareholders and managers of Birdsall who have pleaded guilty in the scheme, along with the engineering firm itself, which is no longer in business.
Gerard and Johnston pleaded guilty on April 12 to fourth-degree charges of making prohibited corporate political contributions through employees. Gerard was required to forfeit $86,200 to the state, and Johnston, $93,720. Each man is debarred for 10 years from personally bidding on public contracts in New Jersey or holding an interest of 5 percent or more in any company that bids for such contracts, Porrino’s office said.
They were charged as part of a March 2013 indictment that stemmed from an investigation by the Division of Criminal Justice Corruption Bureau into the scheme, where they conspired to avoid the restrictions of New Jersey’s Pay-to-Play Act by disguising illegal corporate political contributions as personal contributions of employees, Porrino’s office said.
“Our law prevents politically connected firms from garnering public contracts based on campaign contributions, but Birdsall’s executives gamed the system and secured millions of dollars in contracts for which they should have been disqualified,” Porrino said.
Porrino said the state has launched two anti-corruption programs: a reward program offering up to $25,000 for tips about public corruption, and a well as a whistleblower program that allows lower-level participants in a corruption scheme to potentially avoid prosecution by self-reporting.
“I urge people to help us and help themselves by taking advantage of these programs, which expire on August 1,” Porrino said.
Individuals may report information and apply for the Anti-Corruption Reward Program or Anti-Corruption Whistleblower Program by August 1 by one of the following methods:
- Call the DCJ hotline 866-TIPS-4CJ to speak with detectives 24 hours/7 days a week; or
Birdsall Services Group pleaded guilty on June 13, 2013, to charges of first-degree money laundering and second-degree making false representations for government contracts. The company paid a $500,000 public corruption profiteering penalty and a separate $500,000 anti-money laundering profiteering penalty. It also paid the state $2.6 million to settle a civil forfeiture action filed by the Attorney General’s Office in connection with the criminal case.
Six other executives, shareholders and managers of the Birdsall firm previously pleaded guilty:
- On April 22, 2016, Howard Birdsall, former CEO and largest shareholder of BSG, was sentenced to four years in prison on a charge of second-degree misconduct by a corporate official. He paid $49,808 to the state in forfeiture of his illegal political contributions.
- On June 10, 2016, Thomas Rospos, formerly executive vice president of BSG and its second largest shareholder, was sentenced to three years in prison on a charge of third-degree tampering with public records or information. He paid $150,000 in forfeiture of his illegal contributions.
- On July 11, 2016, William Birdsall, formerly senior vice president and a large shareholder of BSG, was sentenced to 270 days in the county jail and two years of probation on a charge of third-degree misconduct by a corporate official. He paid $129,115 in forfeiture of his illegal contributions, as well as a $75,000 public corruption profiteering penalty.
- On Jan. 6, 2016, Scott MacFadden, former chief administrative officer of BSG, pleaded guilty to third-degree misconduct by a corporate official. He faces a recommended sentence of up to 364 days in jail and a term of probation. He must pay $30,000 in forfeiture of his contributions.
- On Nov. 30, 2012, Philip Angarone, the former marketing director for BSG, pleaded guilty to third-degree tampering with public records or information and fourth-degree making prohibited corporate political contributions through employees. He is awaiting sentencing and faces a sentence of up to 364 days in jail and a term of probation. He must forfeit $26,775.
- On Feb. 12, 2013, Eileen Kufahl, a former marketing manager for Birdsall, pleaded guilty to a fourth-degree charge of making prohibited corporate contributions through employees. She forfeited $17,119 and was admitted into the Pre-Trial Intervention Program.
Under the alleged scheme, instead of Birdsall Services Group making corporate political contributions to campaigns and political organizations that would disqualify it from public contracts awarded by certain government agencies, shareholders and employees of the firm made personal political contributions of $300 or less, which are deemed unreportable. Multiple personal checks were bundled together at Birdsall Services Group and sent to the appropriate campaign or political organization. The shareholders and employees were then illegally reimbursed by Birdsall Services Group, directly or indirectly, through added bonus payments, and the firm falsely omitted the illegally reimbursed contributions in documents filed with the Election Law Enforcement Commission (ELEC) and with government agencies that awarded the firm engineering services contracts. The scheme continued for more than six years and involved more than $1 million in contributions.
Photo of James Johnston provided by N.J. Attorney General’s Office
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