Birdsall Pleads Guilty In Corruption Scheme

Birdsall Services Group pleaded guilty today to charges that the firm engaged in a criminal scheme to make hundreds of thousands of dollars in corporate political contributions through employees to evade New Jersey’s pay-to-play law and obtain millions of dollars in public contracts for which it should have been disqualified, First Assistant Attorney General Thomas R. Calcagni announced today.

The Eatontown-based engineering firm pleaded guilty to charges of first-degree money laundering and second-degree making false representations for government contracts before Superior Court Judge Wendel E. Daniels in Ocean County, Calcagni said in a release.

Under the plea agreement, Birdsall must pay the state $1 million in penalties, fines and restitution and will be prohibited from working on government contracts in New Jersey for 10 years. 

"In addition, it must cooperate fully in the state’s ongoing investigation and prosecution of individual defendants who allegedly orchestrated or took part in the scheme to funnel corporate contributions to campaigns and political organizations through firm employees," the release states.

The $1 million it will pay is in addition to the previously agreed $2.6 million it will pay to the state to settle a civil forfeiture action filed by the Attorney General’s Office in connection with the criminal case, the release states.

Birdsall filed for bankruptcy in response to the state’s forfeiture action, and the settlement, which was approved by the bankruptcy judge, included a requirement that the firm set up a $1 million fund to pay any fines, penalties and restitution arising from the criminal action. 

On June 5, the bankruptcy judge approved a sale of Birdsall’s assets to Partner Engineering and Science for $5.6 million, which the judge will use to pay Birdsall’s obligations. The $3.6 million for the state will come from the sale proceeds as well as assets set aside in the settlement.

“With this plea, Birdsall Services Group has admitted that it made more than half a million dollars in illegal corporate political contributions and lied about them to secure public contracts for which it should have been disqualified,” Calcagni said in the release. “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.”

Judge Daniels scheduled sentencing for Birdsall for Aug. 30.

On March 26, the Division of Criminal Justice obtained a state grand jury indictment charging Birdsall Services Group, its largest shareholder and former CEO Howard C. Birdsall and six other executives and shareholders on charges that they conspired in a scheme to avoid the restrictions of New Jersey’s Pay-to-Play Act by disguising illegal corporate political contributions as personal contributions of employees of the firm.

Under the alleged scheme, instead of Birdsall 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, according to the release.

Multiple personal checks were bundled together at Birdsall and sent to the appropriate campaign or political organization. The shareholders and employees were then illegally reimbursed by Birdsall, 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 hundreds of thousands of dollars in contributions, the release states.

All of the individual defendants face first-degree counts of conspiracy and money laundering, as well as other charges. The first-degree charges carry a sentence of 10 to 20 years in state prison, and the money laundering counts also carry fines and penalties of up to $1 million. The indictment is merely an accusation and the defendants are presumed innocent until proven guilty.

Two former employees of the marketing department of Birdsall, Philip Angarone, 41, of Hamilton, the former marketing director, and Eileen Kufahl, 48, of Bradley Beach, previously pleaded guilty to participating in the scheme and are awaiting sentencing.

The charges stem from an investigation by the Division of Criminal Justice Corruption Bureau.