State v. Armstrong, No. 09-01-00012 (Grand Jury No. 563-09-26-S (N.J. Super. Ct. Jan. 14. 2009)

Frederick J. Armstrong, a construction management specialist in the Capital Planning & Construction Unit of the Department of Corrections (DOC) assisted Kerth and three companies owned by him in submitting rigged bids to the DOC and used his influence over contracting procedures to steer contracts awarded by the department to Independent Alarm. The state’s investigation revealed that between April 1999 and December 2004, Kerth and his companies, with Armstrong’s assistance, rigged nine DOC contracts with contract prices that, in the aggregate, exceeded $230,000. Armstrong pleaded guilty to a single charge of conspiracy to commit the crimes of official misconduct, unlawful restraint of trade, theft by deception, making false representations for government contracts, and misconduct by a corporate official. Judge he was sentenced to three years in state prison and required to forfeit his job with the DOC and be permanently excluded from public employment in New Jersey. 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

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New Jersey v. Sangiuliano

Sangiuliano admitted that he falsified bids for contracts in the Westfield and Tinton Falls school districts at the behest of the engineer who oversaw construction projects in those districts, Kenneth Disko, and paid him approximately $36,000 in kickbacks. Sangiuliano, in bidding on contracts for the Westfield and Tinton Falls school districts, knowingly prepared fraudulent quotes at Disko’s direction bearing the names of other legitimate contractors, making the quotes higher than his own. He also knowingly inflated his company’s (Metropolitan Window’s) quotes and the cost of repairs for the contracts at Disko’s direction. In exchange for the inflated contracts, Sangiuliano allegedly gave kickbacks to Disko of at least $36,000 in 2009 and 2010. The investigation revealed that Disko also received over $44,000 in kickbacks from a prior owner of Metropolitan who is now deceased for contracts awarded from 2001 to 2004.

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New Jersey v. Starr

Kenneth Disko, the former contracted engineer or engineer/architect on record for the Westfield, Tinton Falls and Scotch Plains-Fanwood school districts, pleaded guilty to an accusation charging him with second-degree false representations for a government contract. Disko admitted that he orchestrated a series of bid-rigging and kickback schemes from 2001 to 2010 in those school districts involving Starr and two other contractors. Disko prepared fraudulent quotes and estimates and directed contractors to inflate quotes and estimates. He admitted that he submitted the fraudulent quotes and estimates to the districts and recommended approval of the contracts in exchange for kickbacks from the contractors. In pleading guilty, Starr admitted that in 2009 and 2010, he prepared fictitious quotes from legitimate contractors without their permission and submitted them to Disko in order to appear to be the lowest bidder for contracts worth nearly $25,000 that were awarded to Starr.

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New Jersey v. Gallagher

Kenneth Disko, the former contracted engineer or engineer/architect on record for the Westfield, Tinton Falls and Scotch Plains-Fanwood school districts, pleaded guilty to an accusation charging him with second-degree false representations for a government contract. Disko admitted that he orchestrated a series of bid-rigging and kickback schemes from 2001 to 2010 in those school districts involving Gallagher and two other contractors. Disko prepared fraudulent quotes and estimates and directed contractors to inflate quotes and estimates. He admitted that he submitted the fraudulent quotes and estimates to the districts and recommended approval of the contracts in exchange for kickbacks from the contractors. Gallagher admitted that he helped another contractor to obtain those contracts by preparing fraudulent and fictitious quotes and estimates for his own companies and submitting them to Disko as higher bids than those submitted by Starr. Also, in connection with other contracts that were awarded to Gallagher’s company in the Westfield and Scotch Plains-Fanwood districts, Gallagher inflated quotes and the cost of work performed. The state’s investigation revealed that in return for the inflated contracts, Gallagher gave cash kickbacks to Disko.

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New Jersey v. Capozzoli

Three defendants pleaded guilty in connection with $24,360 worth of contracts for computer services let by the Oakland, Lincoln Park and Haledon police departments. The three defendants were required to enter into consent agreements filed with the court
barring them for three years from doing business, either personally or through any business entity, with any public agency or government in New Jersey. The three men are responsible, jointly and severally, for paying $24,360 to the Attorney General’s Anti-Trust Revolving Fund for anti-trust enforcement efforts. All three are responsible, jointly and severally, for paying $18,960, and Meich and Romano are responsible for paying an additional $5,400. In pleading guilty, the three men admitted that they fabricated bids, purportedly from
competing companies, on public contracts for computer hardware, software and services for
the three police departments.

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New Jersey v. Romano

Three defendants pleaded guilty in connection with $24,360 worth of contracts for computer services let by the Oakland, Lincoln Park and Haledon police departments. The three defendants were required to enter into consent agreements filed with the court
barring them for three years from doing business, either personally or through any business entity, with any public agency or government in New Jersey. The three men are responsible, jointly and severally, for paying $24,360 to the Attorney General’s Anti-Trust Revolving Fund for anti-trust enforcement efforts. All three are responsible, jointly and severally, for paying $18,960, and Meich and Romano are responsible for paying an additional $5,400. In pleading guilty, the three men admitted that they fabricated bids, purportedly from
competing companies, on public contracts for computer hardware, software and services for
the three police departments. In addition to submitting bids from his own company, Romano admitted to submitting
additional false bids on all three contracts in the name of a third company without that
company’s knowledge or authorization.

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New Jersey v. Meich

Three men pleaded guilty to rigging bids in connection with $24,360 worth of contracts awarded to Sparctech Solutions by the Oakland, Lincoln Park and Haledon police departments. The three submitted bids that would allow Sparctech to be the lowest bidder.

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State v. Kerth (N.J. Super Ct., Camden Cty. July 1, 2010)

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…

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Settlement Agreement Between States and Five Guys Franchisor LLC

Fourteen states investigated “no-poach†agreements (clauses, often contained in franchise agreements, which prevent workers from switching between employers of the same franchise in order to obtain a better job with a higher salary or improved working conditions). The states settled with four national fast food franchisors, Dunkin’, Arby’s, Five Guys, and Little Caesars, who agreed to cease using “no-poach†agreements that restrict the rights of fast food workers to move from one franchise to another within the same restaurant chain. Under the terms of the settlements, the franchisors will stop including no-poach provisions in any of their franchise agreements and stop enforcing any franchise agreements already in place. The franchisors have also agreed to amend existing franchise agreements to remove no-poach provisions and to ask their franchisees to post notices in all locations to inform employees of the settlement. Finally, the franchisors will notify the attorneys general if one of their franchisees tries to restrict any employee from moving to another location under an existing no-poach provision. Since the investigation began, Wendy’s provided confirmation that it never used no-poach provisions in their contracts with franchisees. Investigations into Burger King, Popeyes, and Panera continue.

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Settlement Agreement Between States and Little Caesar Enterprises Inc.

Fourteen states investigated “no-poach†agreements (clauses, often contained in franchise agreements, which prevent workers from switching between employers of the same franchise in order to obtain a better job with a higher salary or improved working conditions). The states settled with four national fast food franchisors, Dunkin’, Arby’s, Five Guys, and Little Caesars, who agreed to cease using “no-poach†agreements that restrict the rights of fast food workers to move from one franchise to another within the same restaurant chain. Under the terms of the settlements, the franchisors will stop including no-poach provisions in any of their franchise agreements and stop enforcing any franchise agreements already in place. The franchisors have also agreed to amend existing franchise agreements to remove no-poach provisions and to ask their franchisees to post notices in all locations to inform employees of the settlement. Finally, the franchisors will notify the attorneys general if one of their franchisees tries to restrict any employee from moving to another location under an existing no-poach provision. Since the investigation began, Wendy’s provided confirmation that it never used no-poach provisions in their contracts with franchisees. Investigations into Burger King, Popeyes, and Panera continue.

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