Name:
E-mail:
Employed as: CSX Customer, for N/A
Posted: 16 April 2012
Pines can add this one to his collection. Maybe the names will change
with ones we know on here.
Gordon Fuller of Plainfield, ex-railroad executive, accused of $800K
fraud
He was CEO of Morristown and Erie Railroad
Gordon Fuller of Plainfield, the former chief operating officer of a
Morristown and Erie Railroad, and William Phillips of Langhorne, Pa., a
former project manager for the company, have been indicted Wednesday on
charges that they defrauded the state Department of Transportation of
more than $800,000 by submitting false claims for grant funds in
connection with railway improvement projects.
The state Division of Criminal Justice obtained a five-count state
grand jury indictment charging Fuller, 71, E), the freight railroad’s
CEO, and Phillips, 60, the project manager, with conspiracy, misconduct
by a corporate official, theft by deception, submitting false contract
payment claims, and tampering with public records.
The indictments are the result of an investigation by the Division of
Criminal Justice Corruption Bureau. The investigation previously led to
the indictment of a suspended DOT engineer, Gaudner B. Metellus, and an
alleged accomplice on charges they solicited the Morristown and Erie
(M&E) to fraudulently inflate the cost of a state-funded rail project
by over $700,000 and pay them $325,000 in bribes. M&E alerted the state
to that alleged fraud after Fuller was terminated by the company in
2010.
“We charge that this former railway company executive exploited a state
grant program that was designed to keep our freight rail network strong
in New Jersey, stealing over $800,000 by collecting grant funds for
work that was never performed,” state Attorney General Jeffrey S.
Chiesa said. “We will continue to crack down on individuals who
fraudulently enrich themselves or their companies at the expense of
government programs.”
“This is a good example of an investigation in which our efforts to
uncover and prosecute one crime led to new leads, which we diligently
pursued to charge another crime,” state Criminal Justice Director
Stephen J. Taylor said.
In connection with the indictments, it is alleged that between January
2003 and August 2010, Fuller had M&E submit invoices to create and
reinforce the false impression that certain work had been completed on
four railroad improvement projects for which M&E received DOT grant
funding. In fact, very little of the work had been performed. It is
alleged that M&E fraudulently received a total of approximately
$804,090 in grant funds from the DOT as a result of the false claims.
Phillips allegedly participated in the fraud by submitting false claims
while serving as project manager for M&E between 2003 and 2005.
Deputy Attorney General Perry Primavera presented the indictment to the
grand jury. The investigation was conducted by Det. Sgt. David Salzmann,
Det. Michael Behar, and Deputy Attorney General Anthony A. Picione.
The DOT implemented the New Jersey State Rail Freight Assistance Plan
in 1975 in an effort to preserve and improve the railway freight
transportation network in the state. Under the program, rail lines
doing business in New Jersey apply for funding to assist in various
rehabilitation projects. Eligible projects receive state grants
covering 70 to 90 percent of the total project cost, with the balance
to be paid by the rail line.
M&E, which operates in New Jersey, Pennsylvania, and Maine, received
approval in 2003 for the four projects that are at issue in the
indictment. They involved proposed rehabilitation and upgrading of
three sections of track in Kenville and Cedar Knolls – with related
improvements such as security fencing and lighting – and replacement of
a railway bridge span over the Passaic River in East Hanover.
The grant program requires that no funds be disbursed until all work
has been completed for a particular portion of a project. It is alleged
that Fuller and Phillips knew of the requirement, but fraudulently
submitted invoices for a total of $1,319,417 worth of work, creating
the false impression the work was completed, when in fact only $52,745
worth of work was completed. As a result, M&E received $804,090 in
grant funds it was not entitled to receive.
Second-degree crimes carry a sentence of five to 10 years in state
prison and a fine of up to $150,000, while third-degree crimes carry a
sentence of three to five years in prison and a fine of up to $15,000.
The indictment was handed up to state Superior Court Judge Mary C.
Jacobson in Trenton, who assigned it to Morristown, where Fuller and
Phillips will be ordered to appear in court at a later date to answer
the charges.
Fuller is also named in a Nov. 1 indictment charging him with
conspiracy, insurance fraud and theft by deception, all in the second
degree, as well as fourth-degree falsifying or tampering with records.
That indictment alleges that Fuller fraudulently inflated an insurance
claim by more than $75,000 in connection with damage to a railroad
switch on M&E rail lines in Morristown caused by a truck accident in
2005. Those charges are pending.
The June 29, 2011 indictment charging Metellus, 32, of Philadelphia, a
senior DOT engineer, and his alleged accomplice Ernest J. Dubose, 31,
of Boston, alleges that they solicited representatives of M&E to engage
in a scheme to fraudulently inflate the cost of a project to
rehabilitate the Eagle Rock Railroad Bridge in Roseland from about
$693,000 to $1,421,510 in connection with an application under the
state grant program.
Metellus and Dubose allegedly proposed that the company submit false
invoices for rehabilitation work that would never be performed, and
demanded that the company split the state grant funds with them.
Metellus was responsible for confirming the need for repair work and
inspecting completed work in connection with the grant program.
Officials of M&E alerted the Division of Criminal Justice and
cooperated in the state’s investigation. The two men were originally
arrested and charged on Sept. 23, 2010. The charges in that indictment
are also pending.
—TOM HESTER SR., NEWJERSEYNEWSROOM.COM
View This Article |
|
