White Collar Criminal and Regulatory Lawyer Blog

In a recent decision, the Third U.S. Circuit Court of Appeals affirmed the the prior conviction of former state Senator Wayne Bryant. In upholding Bryant's former convictions on charges of honest services fraud, mail fraud and bribery, the Third Circuit rejected arguments that prosecutors allegedly violated Bryant's rights by interfering with pretrial witnesses, that the evidence was insufficient, and that the jury instructions were defective.

The facts surrounding Bryant's conviction have been well-published. In November 2008, a federal jury found that Bryant steered more than $10 million to R. Michael Gallegher, former dean of the School of Osteopathic Medicine at the University of Medicine and Dentistry of New Jersey, in exchange for extra state funding and a "low show" teaching job (a job which was used to inflate Bryant's pension benefits). Based on the foregoing, Bryant was sentenced to four (4) years and Gallagher was sentenced to eighteen (18) months.

Ambrosio & Tomczak is a full service law firm.

Gregory E. Tomczak, Esq., a partner of Ambrosio & Tomczak, was quoted on the front page of the Boston Globe on June 18, 2011 in the article entitled, "In appeal, DiMasi case to test high court ruling." The arcticle discusses the recent verdict of a federal court jury which convicted former House Speaker Salvatore F. DiMasi of public corruption and the appeal which is scheduled to be filed by Mr. DiMasi's counsel. Counsel for DiMasi believes that an appeal is proper insofar as the prosecution failed to prove that DiMasi overtly promised support for a software company in exchange for secret payments.

Mr. Tomczak does not agree that an overt promise must be proven by direct evidence in order to violate the law; circumstantial evidence is sufficient to prove DiMasi's guilt. In particular, Mr. Tomczak was quoted as saying, "I think it's pretty clear as long as there is some type of payment that benefits the person accused, that's enough."

Mr. Tomczak is a certified criminal trial attorney and specializes in white collar criminal defense.

The U.S. Attorney's Office of New Jersey announced that a Perth Amboy, N.J., man was sentenced to two years of probation and ordered to pay a $10,000 fine for participating in a "straw-donor"scheme to funnel contributions to Joseph Vas's 2006 primary campaign for the Democratic nomination for Congress in New Jersey's 13th District.

Raymond Geneske, 75 - who was the Municipal Chairman of the Perth Amboy
Democratic Party as well as a member of the Perth Amboy Board of Education ("PABOE") and the Middlesex County Improvement Authority ("MCIA") - previously pleaded guilty to an Information charging him with contributing to a federal candidate in the names of others.Geneske cooperated with the government to provide testimony at the trial of Vas, former New Jersey Assemblyman and Perth Amboy Mayor, and Melvin Ramos, Vas' longtime aide.

According to documents filed in the case and statements made in court:

From 2005 to about June 2006, Geneske was a key political adviser to Vas, who was
then a candidate in the Democratic primary election for U.S. Congress for New Jersey's 13th District. Geneske admitted that during that time, he participated in a scheme with others,including Vas, to circumvent the cash limitation and reporting of federal election laws in order to illegally obtain more than $10,000 in contributions for the "Vas for Congress" campaign committee.

As part of the scheme, Geneske accepted approximately $5,000 in cash from an individual who was a prominent developer in Perth Amboy (the "Developer") in February 2006,and then solicited other individuals to write checks out of their personal checking accounts to the "Vas for Congress" committee. Geneske admitted that he provided these individuals with the cash to fund or reimburse their contributions and that he used some of the cash himself to make a contribution in his own name to the "Vas for Congress" committee.

Geneske also stated that in May 2006, he accepted approximately $25,000 more in cash from the Developer, which Geneske subsequently distributed to fund and reimburse additional"conduit-contributions" to the "Vas for Congress" campaign. In that regard, Geneske stated that he discussed with Vas the fact that he had distributed approximately $20,000 of the cash from the Developer to "straw-donors" for Vas's congressional campaign.

In sentencing Geneske, Judge Wigenton made reference to his honest testimony at the Vas and Ramos trial, but stated that "election laws exist for a reason and have to be enforced."

On October 8, 2010, a federal jury convicted Vas and Ramos of two counts of mail fraud for corruptly misusing Vas's position as the mayor to misappropriate $360,000 in affordable housing funds. The jury also convicted Vas of one count of fraud and misapplication of funds in connection with unlawfully misapplying $90,000 in low income housing funds, one count of making false statements to FBI agents, and one count of accepting contributions to a federal candidate in the names of others. Additionally, the jury convicted Ramos of one count of making contributions to a federal candidate in the names of others and two counts of making false
statements to the Federal Election Commission.

The Manhattan U.S. Attorney's Office recently announced that four consultants, along with two relatives, were charged Wednesday with defrauding the city out of more than $80 million related to its long-delayed computerized timekeeping and payroll system.

It is alleged Mark Mazer, a consultant on the CityTime automated timekeeping project, steered more than $76 million in city funds to two consulting firms, including one believed to be run by a relative. The firms then secretly kicked back more than $24.5 million to Mr. Mazer, who was being paid more than $4.4 million for his work.

The project's costs skyrocketed to more than $738 million from $68 million, and in September the city reached an agreement in which it wouldn't make any more payments related to the project.

Prosecutors alleged Mr. Mazer and his wife used more than $3 million in kickbacks to buy two homes and purchased six late-model cars in the past two years.

Mr. Mazer's wife and mother also were charged criminally on Wednesday. Prosecutors alleged his wife and mother controlled shell companies through which the kickbacks were funneled. More than $24.5 million in kickbacks were paid to Mr. Mazer through shell companies controlled by his wife and mother, prosecutors said.

Mr. Mazer was hired as a consultant to perform work for the city's Office of Payroll Administration and had an informal position of authority at the agency as a result, prosecutors said. He allegedly directed tens of millions in dollars in business to consulting firms run by Dmitry Aronshtein, who is believed to be a relative, and Victor Natazon, prosecutors said.

Mr. Aronshtein allegedly obtained more than $55 million in city funds for a company that had no apparent clients, and Mr. Natazon obtained more than $21 million in city contracts, prosecutors said in court papers.

The New Jersey U.S. Attorney's Office recently announced that the former Secretary-Treasurer of a New Jersey Postal Workers union pleaded guilty to conspiring to embezzle funds from the union's operating account.

John McGovern, 54, of Hawthorne, N.J., entered his guilty plea before United States
District Judge Faith S. Hochberg in Newark federal court.

According to Count One of the Indictment to which the defendant pleaded guilty and
statements made in court at this and related proceedings:

McGovern admitted that he and Gary Weightman, 53, of Keansburg, N.J. - the former
President of Local 190 of the North Jersey Division of the American Postal Workers
International Union - conspired to embezzle between $120,000 and $200,000 in union funds between April 2000 and October 2002 from the union's payroll account and from a separate "operating" account. McGovern and Weightman were elected to their union positions in 1992 and received their salaries directly from the union. Under the Union's Constitution and by-laws, they were allowed only $3,000 above their basic postal worker's salary while they held union office. McGovern, who as Secretary-Treasurer controlled the financial transactions for Local 190, supplemented his income with sums of money far exceeding his annual $46,000 salary, issuing payments to himself of approximately $140,000 - as well as additional reimbursement checks over a two-and-a-half-year period.

McGovern pleaded guilty to one count of conspiracy to embezzle from a union, which
carries a maximum potential penalty of five years in prison, a $250,000 fine, and mandatory restitution.

The New Jersey U.S. Attorney's Office recently announced that the President and CEO of a defense contracting firm in Long Island, N.Y., pleaded guilty today to offering a $100,000 bribe to a Department of Defense contracting officer at Fort Monmouth in New Jersey. Thanomsak Hongthong, 57, of Shoreham, N.Y., entered his guilty plea to the bribery count before United States District Judge Anne E. Thompson in Trenton federal court. According to the Information to which Hongthong pleaded guilty, other documents filed in this case, and statements made in court:

On November 18, 2009, Hongthong's company, VDH Precision Machining Corp. (VDH) - a manufacturer of electrical and mechanical component parts located in Bohemia, N.Y. - was awarded a contract worth more than $1.7 million to provide spare parts to the United States Army. This contract was administered by the United States Army's Contracting Center of the Communications and Electronics Command (CECOM) located in Fort Monmouth. CECOM develops, procures and sustains communications and information technologies systems.

Shortly after VDH was awarded this contract, Hongthong contacted the Department of Defense contracting officer at Fort Monmouth who was responsible for the contract. Hongthong told the contracting officer that one of VDH's vendors had increased its price on one of the spare parts VDH was required to provide under the contract, and the contracting officer told Hongthong that there was nothing that the government could do about the situation. Hongthong later called the contracting officer and requested a meeting, which took place at Fort Monmouth on February 5, 2010. At the end of this meeting, Hongthong made a statement to the contracting officer which the contracting officer took as an offer of a bribe. The contracting officer then contacted officials at Fort Monmouth, which began the investigation.

On March 17, 2010, the contracting officer met with Hongthong, at the direction of law enforcement, at a location near Fort Monmouth. During this recorded meeting, Hongthong offered the contracting officer $100,000 if the contracting officer would increase the price of the contract by $430,000. Hongthong also offered the contracting officer $10,000 in cash up front.

In a recorded telephone conversation that took place on March 23, 2010, Hongthong offered the contracting officer $10,000 cash up front, but now asked that the contracting officer increase the overall price of the contract by $800,000. The contracting officer and Hongthong agreed to meet on March 27, 2010, at a rest stop off of the Garden State Parkway. Hongthong agreed to bring the initial $10,000 cash payment to this meeting.

Hongthong also admitted to meeting with the contracting officer at the rest stop on the appointed date. During this meeting, which was recorded by law enforcement, Hongthong gave the contracting officer $10,000 in cash. Hongthong also told the contracting officer that he wanted to meet again to make additional payments.

The maximum potential penalty for bribery of a public official is 15 years in prison and a fine of three times the value of the bribe, or $300,000.