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Execs Admit to Roles in Contract Scheme

Thursday, March 3, 2016

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Two former employees of a New Jersey engineering, environmental and energy consulting firm face prison time and thousands in restitution after conceding their participation in a $1 million conspiracy to evade the state’s “pay-to-play” restrictions.

Thomas Rospos, 64, the former executive vice president of the now-defunct Birdsall Services Group pleaded guilty Thursday (Feb. 25) to a charge of third-degree tampering with public records or information, according to the state Attorney General’s Office.

One week earlier, the firm’s former CEO and largest shareholder Howard Birdsall, 72, pleaded guilty to second-degree corporate misconduct in Superior Court in Ocean County, the AG reported.

Birdsall Services Group
Photos: NJ Attorney General's Office

Thomas Rospos (left) and Howard Birdsall (right) have admitted to playing roles in scheme to avoid the restrictions of New Jersey’s Pay-to-Play Act by disguising illegal corporate political contributions as personal contributions of firm employees.

Under the plea agreements, prosecutors will recommend Rospos spend three years in state prison and pay $150,000 to the state, representing the amount of political donations he personally made in the scheme.

Prosecutors will request Birdsall spend four years in prison and forfeit $49,808 to the state.

Sentencing hearings for Rospos and Birdsall are set for May 13 and April 22, respectively.

A Warning

“Many millions of dollars in taxpayer funds are spent on public contracts each year in New Jersey,” said Elie Honig, the director of the Division of Criminal Justice.

“Our citizens have a right to expect that those contracts will be awarded through a transparent process that strictly serves the public interest, not the interests of the politically connected.

“Within one week, we have taken guilty pleas from the two top executives of Birdsall Services Group, both of whom face prison sentences for overseeing a scheme to make illegal political contributions and stack the deck in their favor in bidding for public engineering contracts.”

Honig says the case should serve as a warning that the office will aggressively prosecute corporations and corporate leaders who engage in criminal schemes to try to skirt New Jersey’s pay-to-play law.

Scheme Details

Birdsall Services Group, formerly based in Sea Girt, NJ, dated to 1919 and had a portfolio of government, municipal, educational and institutional clients in the Northeastern United States. The company’s primary service areas included civil engineering, marine, planning, structural, sustainable energy, transportation and water resources, among others.

In 2013, investigators discovered that the firm allegedly conspired to avoid the restrictions of New Jersey’s Pay-to-Play Act by disguising illegal corporate political contributions as personal contributions of firm employees.

Contributions by for-profit business entities that have or are seeking New Jersey government contracts—a practice known as "pay to play"—are subject to restrictions. Contributions made before the award of a contract may disqualify a business from receiving a contract, and businesses are prohibited from making certain contributions during the term of a contract.

Under the alleged scheme, shareholders and employees of the firm would make personal political contributions of $300 or less, which did not have to be reported to the Election Law Enforcement Commission (ELEC).

Instead of Birdsall Services Group making political contributions that could disqualify it from public contracts, shareholders and employees of the company would then bundle together multiple personal checks and send them to the appropriate campaign or political organization.

Scott MacFadden

In January, Scott MacFadden, 61, the former chief administrative officer of the firm pleaded guilty to a charge of third-degree misconduct by a corporate official.

The shareholders and employees would then receive reimbursement directly or indirectly through added bonus payments from the company, according to prosecutors.

The Star Ledger obtained company records that showed the hundreds of politicians that received money from the engineering firm over the course of six years.

In June 2013, the company pleaded guilty to first-degree money laundering and second degree making false representations for government contracts, paying $1 million penalties. The firm 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. The company folded soon thereafter.

Others Charged

Rospos, Birdsall and five other executives and shareholders were also charged for their roles in the scheme.

In January, Scott MacFadden, 61, the former chief administrative officer of the firm pleaded guilty to a charge of third-degree misconduct by a corporate official. Under his plea agreement, prosecutors will recommend that he be sentenced to 364 days in jail and must pay $30,000 to the state, representing forfeiture of the political contributions he made that the firm reimbursed. He is scheduled for sentencing on June 3.

The charges against the other individual defendants named in the indictment are pending, according to prosecutors.

Two former employees of the marketing department of Birdsall Services Group, Philip Angarone, 43, the former marketing director, and Eileen Kufahl, 51, pleaded guilty to participating in the scheme before the indictment was returned and are also awaiting sentencing.

   

Tagged categories: Business management; Business matters; Engineers; Government; Government contracts; Laws and litigation; North America; Program/Project Management; Regulations

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