AG charges contractors, engineer

TRENTON – An engineer who oversaw construction projects for three school districts was among several people charged Wednesday morning with rigging bids and inflating contracts for various school projects, the state Attorney General’s Office said Wednesday morning.

Kenneth Disko, 47, of Mountainside, an engineer who worked on a contractual basis for the school districts in Westfield, Tinton Falls, and Scotch Plains-Fanwood, was among four people charged with second-degree making false contract payment claims, the state Attorney General’s Office said in a news release.

The other three who were charged with the same offense include contractors John Sangiuliano, 56, of Scotch Plains, co-owner of Metropolitan Metal Window Company, Martin W. Starr, 44, of Cliffwood Beach, owner of Starr Contracting; and Stephen M. Gallagher, 50, of Cliffwood Beach, owner of East Commercial Construction and Tara Construction, the office said.

The office alleged that Disko knowingly prepared fake quotes and estimates in connection with school district contracts between 2001 and 2010, and directed contractors to inflate quotes and estimates.  He allegedly submitted those quotes and estimates to the three school districts and recommended approval of the fraudulently bid contracts in exchange for more than $80,000 in kickbacks from contractors, according to the attorney general’s office.

“We allege that this engineer corrupted the contracting process in three school districts where he worked, taking more than $80,000 in kickbacks from contractors who overcharged the districts for school repairs and renovations,” Attorney General Paula Dow said in a prepared statement.  “These defendants allegedly cheated the taxpayers who fund these districts, as well as the students who might have benefited from the thousands of dollars that were misappropriated.”

In addition, Westfield Schools business administrator Robert A. Berman, 55, of South Plainfield, was charged with second-degree bribery for allegedly accepting  more than $13,000 worth of window glass and doors installed at his home by Metropolitan from 2004 to 2008, in return for making written recommendations that the Westfield Board of Education appoint Metropolitan as the district’s “contractor of record,” the attorney general’s office said.

“We charge that the business administrator for the Westfield School District accepted expensive home repairs, free of charge, from a company that he repeatedly recommended for a lucrative appointment as the district’s contractor of record,” said Director Taylor.  “We will not tolerate this type of illegal, self-serving conduct by public officials.”

In bidding on contracts for the Westfield and Tinton Falls school districts, Sangiuliano, at Disko’s direction, knowingly prepared fraudulent quotes bearing the names of other legitimate contractors, making the quotes higher than his own, Dow said. He submitted the quotes to Disko, who recommended that the contracts be awarded to Sangiuliano’s company, Metropolitan, the attorney general’s office said.

It is also alleged that, at the direction of Disko, Sangiuliano knowingly inflated Metropolitan’s quotes and the cost of repairs for the contracts.  In exchange for the inflated contracts, Sangiuliano allegedly gave kickbacks to Disko in excess of $36,000 in 2009 and 2010.  It is alleged that Disko also received more than $44,000 in kickbacks from a prior owner of Metropolitan who is now deceased for contracts awarded to Metropolitan from 2001 to 2004, the office said.

In bidding one contract in the Westfield schools, Disko allegedly told Sangiuliano he would include the replacement of seven windows in the scope of work for the bidding specifications, even though those seven windows had been recently replaced by Sangiuliano. This allegedly enabled Sangiuliano to bid lower than other contractors, knowing he would not have to replace the windows. Sangiuliano was awarded the job.  He allegedly also kept an additional $18,000 in “bid allowances” for unforeseen work that was approved by Disko as the architect/engineer of record.  Sangiuliano, in fact, did not perform any unforeseen or additional work on the project.

It is further alleged that between 2004 and 2008, Sangiuliano installed free window glass and doors, valued at over $13,000, in Berman’s home in exchange for Berman’s recommendation of Metropolitan as contractor of record for the Westfield School District, the office said.  The contractor of record is contracted on an ongoing basis to handle school repairs and construction projects that arise, according to the attorney general.

The charge against Starr involves contracts worth approximately $39,530 that were awarded to Starr Contracting by the Westfield and Scotch Plains-Fanwood districts.  In 2009 and 2010, Starr allegedly prepared fictitious quotes from legitimate contractors without their permission and submitted them to Disko in order to appear to be the lowest bidder for the contracts, Dow said.

Gallagher allegedly helped Starr obtain those contracts in the Westfield and Scotch Plains-Fanwood school districts by preparing fake quotes and estimates for his own companies and submitting them to Disko as higher bids than those submitted by Starr, the office said.

Regarding other contracts awarded to Gallagher’s companies for projects in the Westfield and Scotch Plains-Fanwood districts, Gallagher allegedly inflated quotes and the cost of work performed, authorities said. In return for the inflated contracts, Gallagher allegedly gave cash kickbacks to Disko.

Starr and Gallagher were arrested Wednesday morning and taken to the Union County Jail, with each being held on $50,000 bail. Disko, Sangiuliano and Berman were charged by complaint-summonses. 

Second-degree charges carry a maximum sentence of 10 years in state prison and a criminal fine of $150,000.  The charges will be presented to a state grand jury for potential indictment.

AG charges contractors, engineer