Jersey City Contractor Admits Conspiring To Rig Contractor Selection Process For Union City Community Development Agency Projects

NEWARK, N.J. – A Hudson County, New Jersey, contractor today admitted conspiring to rig the process for the selection of contractors for projects run by the Union City Community Development Agency, causing losses of at least $40,000, U.S. Attorney Paul J. Fishman announced.

Stanley Parzych, 62, of Jersey City, New Jersey, pleaded guilty to an information charging him with one count of conspiring with agents of a local government agency to obtain by fraud funds provided by Union City. Parzych entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court.

According to documents in this case and statements made in court:

Between June 2007 and November 2010, Parzych owned American Construction, a company located in Jersey City. During that same time period, there was another contractor named Joseph Lado (Lado) who owned a construction company in Union City called Lado Construction LLC. There was also an individual who was an inspector (Inspector 1) at the Union City Community Development Agency (UCCDA), which was a government agency that received funds from the U.S. Department of Housing and Urban Development (HUD) under a federal block grant that provided funding for, among other things, home improvement projects and sidewalk replacement projects.

Parzych conspired with Lado and Inspector 1 to rig the competitive process to perform sidewalk replacement projects and residential rehabilitation projects in favor of certain contractors, including Lado Construction, by submitting false and materially misleading proposals. On many occasions Parzych provided Lado with phony proposals from American Construction that were higher than Lado’s proposals. Sometimes he provided Lado with blank proposal forms from American Construction, which Lado later completed listing amounts that were higher than Lado Construction’s proposals for the same work. Under both of those scenarios, Lado would then submit American Construction’s phony higher-priced proposals and Lado’s own proposals to the UCCDA in order to obtain projects, and ultimately, HUD grant funds, from the UCCDA for the completion of the projects.

The conspiracy charge to which Parzych pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Parzych is scheduled to be sentenced on Oct. 7, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent In Charge Christina Scaringi, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Barbara R. Llanes of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Defense counsel: Daniel J. Welsh, Jersey City, New Jersey