Joseph Hernandez, a former purchasing agent for the township's Municipal Utilities Authority for 10 years, pleaded guilty in federal court in Newark last Monday to charges that he took bribes of cash, a jet ski and home improvements from two township contractors while serving the town.
The 33-year-old Hernandez, who held the position with the MUA from 1990 through June of 2000, pleaded guilty to what counted as a single federal mail fraud charge. As part of the plea bargain, he will only be sentenced on that one charge, but he had to admit to the accusations listed in what is known as a federal "Information."
He faces up to five years of prison and a fine of $250,000 when he receives his sentence from U.S. District Judge Joseph A. Greenaway on Feb. 24.
Hernandez became the fourth North Bergen public official to plead guilty to improper activity in an FBI probe.
In September, former Township Administrator Joseph Auriemma, who also was the chief financial officer for the MUA, pleaded guilty to mail fraud, admitting he received payments and home improvements from a heating and air conditioning contractor who had extensive contracts with the township.
Former Parks and Recreation Commissioner Peter Perez pleaded guilty to taking $26,000 in cash and home improvements from the same municipal contractor. Former Public Safety assistant director Vincent Zappulla pleaded guilty to insurance fraud in a case involving the same contractor.
It was long rumored that Hernandez was involved in some illegal activity, because he resigned from his position with the MUA during rumors of illegal activity more than two years ago.
Hernandez appeared before Greenaway to enter his guilty plea Monday, but didn't say much in the federal court room, except to acknowledge that he took the cash, gifts and home improvements, when asked by Greenaway.
According to a statement released by the U.S. Attorney's office, Hernandez admitted to U.S. Assistant Attorney Jeffrey Clark that he took the bribes in return for fixing bids for two contractors, then making sure that the contractors were paid in a rapid fashion. Hernandez also admitted payments made to one of the vendors was a result of fraudulent over-billing, approved by the MUA.
While neither contractor was named in the court proceedings, it is believed that one of the contractors is once again Leonard Farinola, the owner and operator of Fresco Air Systems, Inc. in Ridgefield, N.J. Farinola had been officially named in one prior indictment involving North Bergen officials and has been identified by both North Bergen officials and an attorney representing one of the charged officials as being the contractor involved with the corruption. Farinola has not been charged with a crime.
As part of his guilty plea, Hernandez admitted that he accepted a $6,000 check and several cash payments, including one payment of $2,500 from one vendor, simply named as a heating, ventilation and air conditioning and construction contractor in the court.
According to Clark, the other vendor, an excavation contractor, gave Hernandez cash payments of approximately $4,000 and constructed a retaining wall at his residence.
That contractor also gave him a jet ski and a trailer in return for help with an excavation project on 69th Street.
That project's original bid was valued at $215,000, but the vendor ultimately received over $550,000 for the project, according to the statements that Hernandez gave Clark.
Hernandez said that he later sold the jet ski for $3,000.
According to Clark, Hernandez was involved in rigging bids for the vendors, who were able to secure MUA contracts without any legitimate competitive process. Hernandez was also involved with drawing up phony competing quotes, fabricating the names of legitimate contracting companies that never really made bids in the first place.
The phony bids were made to appear as if the jobs had been competitively awarded.
In some instances, the so-called "competing" quotes came from the vendors themselves; and at other times Hernandez manufactured the phony quotes on his MUA computer, according to Clark's statement.
According to Clark, some 22 MUA contracts, valued at approximately $233,000, were awarded to the two vendors under the bogus quote scheme.
How to get around competitive bidding
In one instance detailed in the information released by the U.S. Attorney's office, Hernandez oversaw work to the heating and air conditioning contractor without competitive bidding by breaking up a single project - the construction of a storage room at an MUA facility - into eight smaller contracts, each of which was below the threshold for what were believed to be sealed and competitive bids.
Hernandez and the vendor then created bogus quotes and awarded all eight contracts, valued at $72,880, to the vendor.
According to Clark, Hernandez's acceptance of the improper benefits in exchange for his official actions to help the vendors, as well as the concealment of those payments, defrauded the MUA and the citizens of North Bergen of their right to Hernandez's honest services.
The United States Postal Service was also used to further the scheme when the registration for the jet ski was mailed to the Department of Motor Vehicles in the name of the son of the second vendor, despite the fact that Hernandez was then the true owner of the jet ski.
Neither Hernandez nor his attorney, John Haggerty of Randolph, returned phone calls.
North Bergen Mayor Nicholas Sacco did not want to comment on Hernandez' guilty plea.
The township spokesman, Craig Schmalz, issued a statement that named Farinola as the contractor involved.
"This is yet another case involving the same corrupt contractor, Lenny Farinola, and his same circle of friends and co-conspirators," Schmalz said in the statement. "The township will continue to cooperate with this investigation until every avenue is exhausted. This administration has a zero tolerance for corruption and will never tolerate any wrongdoing on the part of any officials."