APP
In one of the final acts by an old, once-prestigious engineering firm, Birdsall Services Group on Thursday agreed to pay a $1 million fine while pleading guilty to the criminal pay-to-play corruption charges that spurred its whirlwind downfall.
Just days before the Eatontown firm’s assets is set to be sold in bankruptcy proceedings, its attorney pleaded guilty on behalf of the company to two criminal charges, admitting the firm reaped government contracts through illegal campaign contributions for more than six years.
The crimes to which attorney Joseph Hayden entered guilty pleas are: making false representations to obtain government contracts; and financial facilitation, which is commonly known as money laundering.
A second charge of money laundering, as well as charges of conspiracy, falsifying records, making prohibited corporation contributions through employees, and concealment of contributions will be dismissed in the plea bargain.
The criminal fine is in addition to $2.6 million that Birdsall agreed to pay in April to settle a civil forfeiture action brought by the state Attorney General’s Office related to the corruption charges.
Superior Court Judge Wendel E. Daniels accepted the firm’s guilty plea and scheduled sentencing for Aug. 30.
Criminal charges related to the pay-to-play scheme are pending against seven of Birdsall’s former executives, who are due back in court on Aug. 5.
The plea arrangement Hayden entered into on behalf of the troubled firm is the same offer he turned down at an arraignment on May 20. Hayden told Daniels then that the deal was unacceptable.
But with the firm’s assets set to be sold in bankruptcy proceedings within days, Hayden said it was in the best interests of the company’s creditors to resolve the criminal charges.
“It’s best to put this case behind us and move on with the sale of the company,’’ Hayden told the judge, noting that Birdsall’s bankruptcy trustee, Edwin Stier, approved the guilty plea and its consequences.
“This closes a chapter on Birdsall so that the new company is free to develop its own identity,’’ Stier said in a telephone interview after the plea hearing.
“I felt it was my obligation to get the criminal case resolved,” he said. “Importantly, it would be clear that any debarment of Birdsall from any future public contracts would have no adverse affect on the acquiring company’s ability to collect money that is owed to Birdsall.”
The plea agreement calls for Birdsall to be barred from obtaining any government contracts in New Jersey for 10 years, although the debarment will not apply to the California firm, Partner Engineering and Science, Inc., which is set to purchase Birdsall’s assets in a bankruptcy proceeding sometime next week.
The plea bargain also requires Birdsall to cooperate in the prosecution of its former executives, Deputy Attorney General Anthony Picione told the judge.
Birdsall, founded in 1919, and the seven former executives were named in a nine-count indictment March 26, following an investigation by the state into the company’s campaign contribution practices.
The indictment alleged the defendants disguised corporate political contributions that would have barred the firm from receiving public contracts under the state's pay-to-play laws as smaller contributions from individuals that are not required to be reported. The individuals were reimbursed for the political contributions through company bonuses, authorities said. The scheme went on for more than six years and involved hundreds of thousands of dollars in illegal campaign contributions that netted millions of dollars in public contracts, authorities have alleged.
Hayden, in admitting guilty on behalf of the firm, said the scheme went on from Jan 1, 2006, through May 31, 2012, in Ocean, Monmouth, Middlesex, and Bergen counties and elsewhere. He acknowledged that it was proceeds of a criminal enterprise — the profits from the illegally obtained contracts — that were used to reimburse employees for making campaign contributions.
“This is a victory for the public and for all who believe that government contracts should be awarded fairly and openly, not handed to politically connected firms that pay for the privilege with campaign contributions,” First Assistant Attorney General Thomas R. Calcagni said in a news release issued after the plea hearing.
Hayden said Judge Michael B. Kaplan, who is overseeing the bankruptcy proceeding in federal court, signed an order Thursday morning approving the plea deal in the criminal case.
Since the firm’s indictment, its downfall has been swift.
Upon the indictment, the state froze Birdsall’s assets, then valued at $41.6 million. That prompted Birdsall to file for Chapter 11 bankruptcy protection.
But before Birdsall agreed to settle the civil forefeiture case, it had to temporarily furlough its employees when it couldn’t gain access to cash to make payroll.
The firm’s staff has dwindled from 352 at the time the indictment was handed up, to about 100, and a number of its clients has dropped the firm.
Kaplan last week approved the sale of the firm’s assets to Partner, a Torrance, Calif.-based firm with 24 offices nationwide, including in Red Bank and Ramsey in New Jersey. The deal is expected to close next week, Stier said.
The company will pay $5.6 million for assets that include Birdsall's accounts receivable, physical assets, select contracts, existing project files, and select intellectual property and license agreements.
Last year, Birdsall had about 1,850 public contracts worth more than $26 million, representing about half of its business. Many of those contracts were with government agencies in Monmouth and Ocean counties. Birdsall has been engaged in some Sandy recovery projects, including rebuilding Belmar’s boardwalk, but Belmar was among the entities that recently dropped Birdsall.
In one of the final acts by an old, once-prestigious engineering firm, Birdsall Services Group on Thursday agreed to pay a $1 million fine while pleading guilty to the criminal pay-to-play corruption charges that spurred its whirlwind downfall.
Just days before the Eatontown firm’s assets is set to be sold in bankruptcy proceedings, its attorney pleaded guilty on behalf of the company to two criminal charges, admitting the firm reaped government contracts through illegal campaign contributions for more than six years.
The crimes to which attorney Joseph Hayden entered guilty pleas are: making false representations to obtain government contracts; and financial facilitation, which is commonly known as money laundering.
A second charge of money laundering, as well as charges of conspiracy, falsifying records, making prohibited corporation contributions through employees, and concealment of contributions will be dismissed in the plea bargain.
The criminal fine is in addition to $2.6 million that Birdsall agreed to pay in April to settle a civil forfeiture action brought by the state Attorney General’s Office related to the corruption charges.
Superior Court Judge Wendel E. Daniels accepted the firm’s guilty plea and scheduled sentencing for Aug. 30.
Criminal charges related to the pay-to-play scheme are pending against seven of Birdsall’s former executives, who are due back in court on Aug. 5.
The plea arrangement Hayden entered into on behalf of the troubled firm is the same offer he turned down at an arraignment on May 20. Hayden told Daniels then that the deal was unacceptable.
But with the firm’s assets set to be sold in bankruptcy proceedings within days, Hayden said it was in the best interests of the company’s creditors to resolve the criminal charges.
“It’s best to put this case behind us and move on with the sale of the company,’’ Hayden told the judge, noting that Birdsall’s bankruptcy trustee, Edwin Stier, approved the guilty plea and its consequences.
“This closes a chapter on Birdsall so that the new company is free to develop its own identity,’’ Stier said in a telephone interview after the plea hearing.
“I felt it was my obligation to get the criminal case resolved,” he said. “Importantly, it would be clear that any debarment of Birdsall from any future public contracts would have no adverse affect on the acquiring company’s ability to collect money that is owed to Birdsall.”
The plea agreement calls for Birdsall to be barred from obtaining any government contracts in New Jersey for 10 years, although the debarment will not apply to the California firm, Partner Engineering and Science, Inc., which is set to purchase Birdsall’s assets in a bankruptcy proceeding sometime next week.
The plea bargain also requires Birdsall to cooperate in the prosecution of its former executives, Deputy Attorney General Anthony Picione told the judge.
Birdsall, founded in 1919, and the seven former executives were named in a nine-count indictment March 26, following an investigation by the state into the company’s campaign contribution practices.
The indictment alleged the defendants disguised corporate political contributions that would have barred the firm from receiving public contracts under the state's pay-to-play laws as smaller contributions from individuals that are not required to be reported. The individuals were reimbursed for the political contributions through company bonuses, authorities said. The scheme went on for more than six years and involved hundreds of thousands of dollars in illegal campaign contributions that netted millions of dollars in public contracts, authorities have alleged.
Hayden, in admitting guilty on behalf of the firm, said the scheme went on from Jan 1, 2006, through May 31, 2012, in Ocean, Monmouth, Middlesex, and Bergen counties and elsewhere. He acknowledged that it was proceeds of a criminal enterprise — the profits from the illegally obtained contracts — that were used to reimburse employees for making campaign contributions.
“This is a victory for the public and for all who believe that government contracts should be awarded fairly and openly, not handed to politically connected firms that pay for the privilege with campaign contributions,” First Assistant Attorney General Thomas R. Calcagni said in a news release issued after the plea hearing.
Hayden said Judge Michael B. Kaplan, who is overseeing the bankruptcy proceeding in federal court, signed an order Thursday morning approving the plea deal in the criminal case.
Since the firm’s indictment, its downfall has been swift.
Upon the indictment, the state froze Birdsall’s assets, then valued at $41.6 million. That prompted Birdsall to file for Chapter 11 bankruptcy protection.
But before Birdsall agreed to settle the civil forefeiture case, it had to temporarily furlough its employees when it couldn’t gain access to cash to make payroll.
The firm’s staff has dwindled from 352 at the time the indictment was handed up, to about 100, and a number of its clients has dropped the firm.
Kaplan last week approved the sale of the firm’s assets to Partner, a Torrance, Calif.-based firm with 24 offices nationwide, including in Red Bank and Ramsey in New Jersey. The deal is expected to close next week, Stier said.
The company will pay $5.6 million for assets that include Birdsall's accounts receivable, physical assets, select contracts, existing project files, and select intellectual property and license agreements.
Last year, Birdsall had about 1,850 public contracts worth more than $26 million, representing about half of its business. Many of those contracts were with government agencies in Monmouth and Ocean counties. Birdsall has been engaged in some Sandy recovery projects, including rebuilding Belmar’s boardwalk, but Belmar was among the entities that recently dropped Birdsall.
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