Arrigo pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to a charge of one count of paying bribes totaling approximately $65,000 to a Bayonne official who served as the director of Bayonne’s Department of Community Development. Arrigo also pleaded guilty to one count of theft and conversion of government funds in the amount of $40,000, and one count of submitting a false tax return for tax year 2011.
According to a statement issued by the City of Bayonne, federal authorities have been investigating the manner in which Community Block Development Grant (CBDG) Funds assigned to the City of Bayonne have been utilized. The City discovered improprieties in this area and reported those improprieties to the appropriate authorities. The City cooperated with the agencies participating in this investigation.
“Over a year ago and as part of its own investigation, the City removed from its payroll, an employee associated with the disbursement of CBDG funds,” said Corporation Counsel Charles D’Amico in a statement issued after the plea. “Since that time the City has participated in several audits of the CBDG accounts. The City also last year hired an individual whose sole responsibilities are to oversee the CBDG funding and report any past improprieties discovered directly to the City Law Division. Ms. Samantha Howard, the new Acting Director, has received and continues to receive extensive training from the U.S. Department of HUD concerning the proper handling of CBDG funds.”
The employee has not yet been charged with the incident.
Federal authorities citing documents filed in this case and statements made in court said Arrigo was the owner of Shadow Contracting LLC, a general contracting company in Bayonne.
The Bayonne Department of Community Development (CBDCD) received funds from the U.S. Department of Housing and Urban Development (HUD) under a federal program that provided grants of up to $20,000 to low-income families to rehabilitate their homes and to repair conditions that were considered to affect their health and safety, and their homes’ accessibility, energy efficiency, or code compliance. The CBDCD also provided these HUD funds under the same federal program to nonprofit organizations for the same purpose.
“A Bayonne public official served as the director of the CBDCD and was responsible for reviewing applications for HUD grant funds from the City of Bayonne and awarding such funds to qualified applicants,” the federal statement said.
According to the release by the U.S. Attorney’s office, in September 2010, the public official allegedly solicited cash payments from Arrigo in exchange for the public official’s assistance in awarding HUD grant funds from the City of Bayonne to Arrigo as the owner of Shadow Contracting. From September 2010 to February 2013, Arrigo allegedly made cash payments to the public official totaling approximately $65,000 in exchange for the two public official’s alleged assistance in awarding HUD grant funds from Bayonne to Arrigo that totaled approximately $426,000.
The federal statement said, “In September 2011, Arrigo allegedly assisted another contractor by supplying it with a bid on behalf of Shadow Contracting that was higher than the first contractor’s bid to enable the first contractor to obtain HUD grant funds from the City of Bayonne.
This second contractor allegedly then submitted the two bids to the CBDCD and, as a result of his collusion with Arrigo, the contractor fraudulently obtained $20,000 in HUD grant funds from the CBDCD.
In December 2011, Arrigo allegedly caused the same contractor to provide Arrigo with a bid that was higher than Arrigo’s bid for the purpose of obtaining HUD grant funds from Bayonne. Arrigo submitted the contractor’s bid along with his own to the CBDCD and, as a result, fraudulently obtained another $20,000 in HUD grant funds from the CBDCD.
Arrigo also made and subscribed a U.S. Individual Tax Return, Form 1040, for tax year 2011, which he did not believe to be true and correct as to every material matter, including approximately $151,993 in unreported income.”
To date, the public official accused of allegedly taking the bribe has not yet been charged, nor has a second contractor been named.
According to the statement, “The bribery and theft of government funds charges to which Arrigo pleaded guilty carry maximum potential penalties of 10 years in prison and maximum fines of $250,000. The charge of filing a false tax return, to which Arrigo pleaded guilty, carries a maximum potential penalty of three years in prison and a fine of $250,000. Sentencing is currently scheduled for Feb. 3, 2014.”
Al Sullivan may be reached at firstname.lastname@example.org.