03/29/2010

News / Suspended Department of Corrections Official Pleads Guilty to Conspiracy to Rig Bids for State Contracts

TRENTON – Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced that a suspended manager for the New Jersey Department of Corrections (DOC) pleaded guilty today to conspiring with an alarm system contractor to rig bids for DOC contracts.

According to Director Taylor, Frederick J. Armstrong, 60, of Pemberton Borough, pleaded guilty before Superior Court Judge Irvin J. Snyder in Camden County to a single charge of conspiracy to commit the crimes of official misconduct, unlawful restraint of trade, theft by deception, making false representations for government contracts, and misconduct by a corporate official. Armstrong is suspended without pay from his job as a construction management specialist in the DOC Capital Planning & Construction Unit.

The charge was contained in a Jan. 14, 2009 state grand jury indictment which also charged Paul Kerth, 58, of Collingswood, and three companies that Kerth owns: Independent Alarm Distributors, Inc., Adirondack Alarm, and Automatic Alarm Associates.

In pleading guilty, Armstrong admitted that he assisted Kerth in submitting rigged bids to the DOC and used his influence over contracting procedures to steer contracts awarded by the department to Independent Alarm. Under the plea agreement, the state will recommend that Armstrong be sentenced to three years in state prison. He must forfeit his job and will be permanently barred from public employment in New Jersey.

Deputy Attorney General Steven J. Zweig took the guilty plea for the Division of Criminal Justice Corruption Bureau. Judge Snyder scheduled sentencing for May 14.

On Sept. 30, 2009, Kerth and his three companies each pleaded guilty to third-degree theft by deception. The state will recommend that Kerth be sentenced to a term of probation conditioned upon him serving 364 days in the county jail. He and his companies are barred from public contracts in New Jersey for five years, and he must pay $150,000 in restitution into the state’s Anti-Trust Revolving Fund for anti-trust enforcement efforts.

An investigation by the DOC Special Investigations Division and the Division of Criminal Justice Corruption Bureau revealed that between April 1999 and December 2004, Kerth and his companies, with Armstrong’s assistance, rigged at least nine DOC contracts with contract prices that, in the aggregate, exceeded $230,000.

The investigation was conducted and coordinated for the Division of Criminal Justice Corruption Bureau by Lt. Keith Lerner, Detective Paul Marfino Jr., Detective David Patella and Deputy Attorney General Zweig. Senior Investigators Manuel Alfonso and Charles Walters conducted the investigation for the Department of Corrections Special Investigations Division.

Attorney General Dow thanked the Department of Corrections for its referral and extensive assistance in the investigation.

http://www.nj.gov/oag/newsreleases10/pr20100329a.html

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