AG: Former Birdsall Exec McFadden Pleads Guilty to Misconduct

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A former executive of Birdsall Services Group pleaded guilty today to participating in a criminal scheme in which hundreds of thousands of dollars in corporate political contributions were illegally made through employees of the firm to evade New Jersey’s pay-to-play law.  Two other former employees previously pleaded guilty and are awaiting sentencing.

Scott MacFadden, 61, of Brick, who formerly was chief administrative officer of Birdsall Services Group, pleaded guilty today to a charge of third-degree misconduct by a corporate official before Superior Court Judge James Den Uyl in Ocean County.  Under the plea agreement, the state will recommend that MacFadden be sentenced to up to 364 days in the county jail as a condition of a term of probation.  He also must pay $30,000 to the state, representing forfeiture of the political contributions that he made on behalf Birdsall Services Group, which were reimbursed by the firm.

Deputy Attorney General Anthony A. Picione, Chief of the Division of Criminal Justice Corruption Bureau, took the guilty plea today.  He is prosecuting the case with Deputy Attorney General Mallory Shanahan.  Judge Den Uyl scheduled sentencing for MacFadden for June 3.

Birdsall Services Group – an engineering firm formerly based in Monmouth County that now is out of business – pleaded guilty on June 13, 2013 to charges of first-degree money laundering and second-degree making false representations for government contracts.  As a result of its plea, Birdsall Services Group paid two major criminal penalties: a $500,000 public corruption profiteering penalty and a $500,000 anti-money laundering profiteering penalty.  In each instance, the penalty was the maximum amount authorized by law. Birdsall also paid the state $2.6 million to settle a civil forfeiture action filed by the Attorney General’s Office in connection with the criminal case.

The charges against Birdsall were contained in a March 26, 2013 indictment, which also charged its largest shareholder and former CEO Howard C. Birdsall, 72, of Brielle, and six other executives and shareholders, including MacFadden.  The charges stemmed from an investigation by the Division of Criminal Justice Corruption Bureau, which found that the defendants allegedly conspired to avoid the restrictions of New Jersey’s Pay-to-Play Act by disguising illegal corporate political contributions as personal contributions of firm employees.  The charges against the other individual defendants in the indictment are pending.  Thomas Rospos, 63, of Belmar, a former executive vice president of Birdsall, is scheduled to go on trial before Judge Den Uyl on Feb. 22.  He is the first defendant scheduled for trial.

Two former employees of the marketing department of Birdsall, Philip Angarone, 43, of Hamilton, the former marketing director, and Eileen Kufahl, 51, of Bradley Beach, pleaded guilty to participating in the scheme before the indictment was returned and are awaiting sentencing.

All of the remaining defendants who are charged in the indictment face first-degree counts of conspiracy and money laundering, as well as other charges.  The first-degree charges carry a sentence of 10 to 20 years in state prison, and the money laundering counts also carry fines and penalties of up to $1 million.  The indictment is merely an accusation and the defendants are presumed innocent until proved guilty.

Under the alleged scheme, instead of Birdsall Services Group making corporate political contributions to campaigns and political organizations that would disqualify it from public contracts awarded by certain government agencies, shareholders and employees of the firm made personal political contributions of $300 or less, which are deemed unreportable.  Multiple personal checks were bundled together at Birdsall Services Group and sent to the appropriate campaign or political organization.  The shareholders and employees were then illegally reimbursed by Birdsall Services Group, directly or indirectly, through added bonus payments, and the firm falsely omitted the illegally reimbursed contributions in documents filed with the Election Law Enforcement Commission (ELEC) and with government agencies that awarded the firm engineering services contracts.  The scheme continued for more than six years and involved hundreds of thousands of dollars in contributions.

AG: Former Birdsall Exec McFadden Pleads Guilty to Misconduct