Case Details

Year Initiated/Committed


Year Resolved


Lead State


Participating States


Paul Kerth


Conspiracy in the second degree, official misconduct in the second degree; conspiracy in restraint of trade in the second degree; theft by deception in the second degree; false representations for a government contract in the second degree; misconduct by corporate official in the second degree

Sentence Imposed

364 days in county jail, five years probation, barred from all public contracts in New Jersey for a period of five years and must pay $150,000 in restitution

Case Description

Kerth and three companies he owns – Independent Alarm Distributors, Inc., Adirondack Alarm, and Automatic Alarm Associates – pleaded guilty on Sept. 29, 2009 to third-degree theft by deception. With the help of Frederick Armstrong, a construction management specialist at the NJ Dept. of Corrections, between April 1999 and December 2004, Kerth and his companies rigged nine DOC contracts with contract prices that, in the aggregate, exceeded $230,000.

In pleading guilty, Kerth admitted that, at Armstrong’s request, he solicited other contractors to submit higher “cover” bids so Independent Alarm would win a 2003 contract with the Department of Corrections for $39,600 to install closed-circuit television components at Mid-State Correctional Facility. Under state law, Independent had to be the lowest qualified bidder among at least three independent bids to win the contract.
Kerth further admitted that Automatic Alarm submitted a cover bid so that Independent Alarm would win a 2002 contract for $5,030 to install upgraded alarm systems in two schools in Haddon Township.