10-2-2003 -- Hernandez, Joseph -- Sentencing -- New Release

Former North Bergen MUA Official Sentenced to Maximum Allowable Sentence of 30 Months

NEWARK - A former purchasing agent for the North Bergen MUA was sentenced today to 30 months in prison - the maximum allowable under federal Sentencing Guidelines - for accepting cash payments, a jet ski and home improvements from two MUA contractors and concealing his acceptance of the bribes, U.S. Attorney Christopher J. Christie announced.

Joseph Hernandez, 34, pleaded guilty on Nov. 18, 2002, before U.S. District Judge Joseph A. Greenaway Jr. to a one-count Information charging mail fraud. Today, Judge Greenaway characterized Hernandez's conduct as "contemptible," noting that his criminal conduct occurred over a sustained period. The Judge also derided Hernandez for his remark to federal probation officials that he was "playing the game" in municipal government.

The maximum allowable penalty range Hernandez was facing under the Sentencing Guidelines was 24 months to 30 months. There is no parole in the federal system, and Hernandez can be expected to serve most or all of his sentence.

"This is, unfortunately, just another deplorable example of a greedy, self-dealing, corrupt public official at work," said Christie. "If public shame and scorn isn't enough to deter others, a prison sentenced like this certainly should."

As the purchasing agent of the North Bergen Municipal Utilities Authority from 1990 to June 2000, Hernandez was intimately involved in the awarding of MUA contracts and the processing of payments under those contracts. At his plea hearing, Hernandez admitted taking cash payoffs and other improper benefits from two contractors with MUA contracts, in return for facilitating and speeding the payment process for the vendors' work under their MUA contracts. Hernandez admitted that those payments were to one of the vendors which he knew were the result of fraudulent over billing of the MUA.

Hernandez also admitted that he accepted a $6,000 check and several cash payments, including one payment of $2,500 from one vendor, Leonard Farinola, a heating, ventilation and air conditioning and construction contractor. Farinola awaits sentencing in connection with his guilty plea in February.

From the second MUA vendor, Domenic Grano, an excavation contractor, Hernandez admitted that he accepted not only cash payments of approximately $4,000, but also the construction of a retaining wall at his personal residence and a jet ski and trailer. The jet ski was provided to Hernandez, he said, in return for his official acts in connection with an excavation contract on 69th Street originally valued at $215,000 but under which the vendor ultimately received over $550,000. Hernandez later sold the jet ski for $3,000.

Judge Greenaway sentenced Grano earlier this month to 21 months in prison.

Hernandez also admitted that in return for the cash payments and other benefits, he participated with the contractors in a contract-rigging scheme. With Hernandez's assistance, the vendors were awarded contracts without any competitive process, while phony competing quotes were manufactured in the names of real but unsuspecting companies to make it appear as if the jobs had been competitively awarded. In some instances Hernandez accepted supposed competing quotes from the vendors knowing that they were bogus; at other times Hernandez manufactured the phony quotes on his MUA computer. According to the Information, 22 MUA contracts valued at approximately $233,000 were awarded to the two vendors under the bogus quote scheme.

In one instance detailed in the Information, Hernandez steered work to Farinola without competitive bidding by breaking up a single project, the construction of a storage room at an MUA facility, into eight smaller contracts, each of which was below the threshold for sealed, competitive bids and subject only to a requirement that competing quotes be solicited. Hernandez and the vendor then created bogus quotes and awarded all eight contracts, valued at $72,880, to the vendor.

The Information charges that Hernandez's acceptance of the improper benefits in exchange for his official actions to help the vendors, as well as the concealment of those payments, defrauded the MUA and the citizens of North Bergen of their right to Hernandez's honest services. The United States mails were used to further the scheme when the registration for the jet ski was mailed to the Department of Motor Vehicles in the name of the son of the second vendor, despite the fact that Hernandez was then the true owner of the jet ski.

Under U.S. Sentencing Guidelines, Judge Greenaway determined Hernandez's actual sentence based on a formula that took into account the severity and characteristics of the offense, as well as other factors.

Christie credited Special Agents of the FBI Newark in Newark, under the direction of Special Agent in Charge Louie F. Allen, for their work in developing the case.

The Government is represented by Assistant U.S. Attorneys Jeffrey D. Clark and Phillip Kwon of the U.S. Attorney's Office in Newark.

Defense Attorney: Joseph Rotella, Esq. Newark