02-17-04 -- Malloy, Patrick G -- Sentencing -- New Release

Former New Hanover Township Mayor Sentenced to Prison for Obstructing Justice in Public Corruption Probe

TRENTON - Former New Hanover Township Mayor Patrick G. Malloy was sentenced today to six months in federal prison to be followed by six months of home confinement for witness tampering in connection with a grand jury investigation of the township Board of Education's award of a federally funded contract to one of his relatives, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Garrett E. Brown, Jr., also ordered Malloy, 69, to serve three years of supervised release (which includes the home confinement period) upon the completion of his prison sentence and to pay $30,000 in fines. Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all of that time.

In announcing the sentence, Judge Brown recognized Malloy's serious health issues and acknowledged that it played a role in his decision to have Malloy serve part of his sentence in home confinement. In serving home confinement, Malloy may not leave his home except for approved purposes, such as healthcare appointments.

Malloy, the township's mayor since 1968, turned himself in with his attorney to Special Agents of the FBI on July 17, 2003, when he was charged in a criminal Complaint.

Malloy pleaded guilty to a one-count Information on Nov.13. The Information to which he pleaded guilty charges that he instructed a witness - who was cooperating with the FBI and wearing a recording device - to lie to a grand jury investigating the award of the school board contract to Malloy's relative.

At his plea hearing, Malloy admitted that from 1982 to July 1999, James J. Nash, former Treasurer of School Funds for the New Hanover Township Board of Education (BOE) and former township administrator, steered more than 30 township contracts to vendors identified by Malloy with whom Malloy had a personal and/or financial relationship.

Nash, who is cooperating in the investigation, pleaded guilty on June 16, 2003, to a one-count Information charging him with misapplying federal money received by the New Hanover Board of Education. He is scheduled to appear before Judge Brown for sentencing tomorrow, Feb. 18 at 9:00 a.m.

Nash 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 admissions from Nash at his guilty plea - it was Malloy, Nash, a then-member of the BOE and a local contractor, among others, who met on April 15, 1999, and confirmed their prior agreement that the sidewalk contract would go to Malloy's relative. Prior to that meeting, according to Nash, the BOE member obtained a written quote from the relative that 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 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 Malloy's relative, who would have the lowest price, according to Malloy.

Nash admitted that he directed another New Hanover municipal employee to fabricate a quote in the name of an actual local vendor. That vendor subsequently informed the FBI that he did not prepare the quote nor did he have knowledge of the job.

Later that day, at the April 15 evening meeting of the BOE, the school 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 paid the $11,500 by the BOE.

Nash admitted that the relative was paid with funds that the BOE 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.

Malloy admitted that on June 15, 2002, he met with Nash and the township employee who had fabricated a vendor's quote. At the meeting in township offices, according to Malloy, the employee told Nash and Malloy that the employee had been granted immunity and subpoenaed to testify before a federal grand jury regarding the sidewalk contract.

Malloy also admitted that at various points during the conversation he instructed the employee to withhold information and make certain misrepresentations to the grand jury. Additionally, Malloy admitted that he focused on telling the employee what to say to the grand jury regarding the typing of the quote in the name of the local vendor, specifically, to falsely state that the local vendor's son directed the employee to type up the quote for the sidewalk. Malloy admitted that at least twice during the meeting he suggested and directed the employee to respond to the questions in the grand jury by saying that he couldn't remember, rather than making statements about what had occurred. In fact, Malloy admitted that he knew that the employee had a specific recollection regarding these matters.

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.

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Defense Attorney: George Robert Wells, Esq. Princeton