2003-07-17 -- Malloy, Patrick G. -- Criminal Complaint -- News Release

New Hanover Township Mayor Charged with Obstructing Justice in School Board Bid-Rigging Probe

TRENTON - New Hanover Township Mayor Patrick G. Malloy turned himself in to federal authorities today, to answer criminal charges of witness tampering in connection with a grand jury investigation of the township Board of Education's award of a federally funded contract to a relative of the mayor, U.S. Attorney Christopher J. Christie announced.

Malloy, 69, is charged in a one-count criminal complaint alleging that he instructed a witness - who was cooperating with the FBI and wearing a recording device - to lie to the grand jury investigating the award of the school board contract to Malloy's relative. Malloy is scheduled to make an initial appearance in court today before U.S. Magistrate Judge Tonianne Bongiovanni at 2 p.m.

Malloy, the township's mayor since 1968, was not arrested. He was allowed to turn himself in with his attorney to Special Agents of the FBI prior to his court appearance.

"Here we have entrenched, arrogant public officials feeding at the public trough," Christie said. "Corruption runs north to south in New Jersey, and we will continue to do our part to stamp it out in all regions of the state."

The investigation in New Hanover Township is continuing, Christie said.

The Government will next seek an indictment from the federal grand jury in Trenton. If convicted of the witness tampering charge, the defendant faces a maximum penalty of 10 years in federal prison and a $250,000 fine.

Former New Hanover Township Administrator James J. Nash, who also served previously as treasurer of school funds for the township Board of Education (BOE), pleaded guilty on June 16 to his role in the bid-rigging case. (See news release at the Public Affairs Office website, www.njusao.org )

Nash, who is cooperating in the investigation, admitted at his plea hearing that he and a then-unnamed township official planned with others how to steer the contract for the replacement of a sidewalk in front of the New Hanover Township School to the mayor's relative.

According to the criminal complaint against Malloy - and to admissions from Nash at his guilty plea - it was Malloy, Nash and a member of the BOE and others who met on April 15, 1999, and agreed the contract would go to Nash's relative.

Prior to that meeting, according to Nash and the criminal complaint, the BOE member obtained a written quote from the relative which priced the sidewalk job at $11,500. Nash and the BOE member subsequently told the FBI that it was confirmed at the April 15, 1999, meeting with Malloy that they would obtain two fabricated written quotes for higher prices in the names of local vendors, and that those would be submitted to the New Hanover BOE, along with the quote from Malloy's relative.

It was anticipated that the New Hanover BOE would believe that all three quotes were bona fide and award the sidewalk job to the Malloy relative, who would have the lowest price, according to the complaint. Nash admitted that he directed another New Hanover municipal employee to fabricate a quote in the name of a real local vendor. That vendor subsequently informed the FBI that he neither prepared the quote for the sidewalk job or had knowledge of the job.

On April 15, 1999, the BOE awarded a contract in the amount of $11,500 to Malloy's relative, rejecting the fabricated quotes in the amounts of $11,950 and $12,200. The job was completed three months later, and Malloy's relative was pay the $11,500 by the BOE.

According to the Information, the relative was paid with funds that the Board of Education received from Impact Aid, a federal grant program designed to reimburse local school districts for the impact that federal land acquisitions had on the municipal tax base, and consequently, their respective school budgets. The BOE qualified for Impact Aid because the United States owned the land occupied by the Fort Dix military base in New Hanover Township.

Nash pleaded guilty to a one-count Information charging him with misapplying federal money received by the New Hanover Board of Education by causing fabricated vendors' quotes to be submitted to the school board to steer the 1999 Board of Education contract to Malloy's relative. Nash, who is scheduled to be sentenced by the U.S. District Judge Garrett E. Brown, Jr. on Sept. 22, faces a maximum penalty of 10 years in federal prison and a $250,000 fine.

Christie credited Special Agents of the FBI's Trenton Resident Agency, under the direction of Louie F. Allen, Special Agent in Charge in Newark, for its investigation.

The Government is represented by Assistant U.S. Attorney Treby Williams, of the U.S. Attorney's Criminal Division in Trenton.

Defense Attorney:

Lee H. Engelman, Esq. Pennington