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Press Release

Former Newark Watershed Conservation Official And Former Contractor Admit Roles In Bribery And Kickback Scheme

For Immediate Release
U.S. Attorney's Office, District of New Jersey

NEWARK, N.J. – A former high-ranking employee of the Newark Watershed Conservation and Development Corp. (NWCDC) today admitted accepting $956,948 in kickback payments for his and the former executive director’s assistance in awarding work to contractors, U.S. Attorney Paul J. Fishman announced.

Donald Bernard Sr., 68, of West Orange, New Jersey, pleaded guilty before U.S. District Judge Jose Linares in Newark federal court to Counts 9 and 10 of a 20-count indictment returned in December 2014, charging him with the use of interstate facilities to promote and facilitate bribery in violation of the Travel Act, and Count 1 of an information that charges him with making and subscribing a false personal tax return for the 2009 tax year.

Separately before Judge Linares, Giacomo “Jack” DeRosa, 59, of Clinton Township, New Jersey, who was also previously indicted in December 2014, pleaded guilty today to Counts 4 through 6 of the indictment charging him with laundering a portion of $85,000 he provided to Bernard from January 2008 to August 2012 in connection with roofing work that Bernard facilitated for DeRosa with the NWCDC. 

According to documents filed in these and other cases and statements made in court:

Bernard served as a consultant to the NWCDC (from 2008 to January 2010) and then as a salaried employee (from January 2010 to March 2013). From 2008 to March 2013, Bernard was part of a corrupt arrangement with former NWCDC Executive Director Linda Watkins Brashear to solicit $956,948 in cash kickbacks from certain NWCDC contractors in exchange for providing them work and other assistance. Bernard and Brashear facilitated NWCDC payments to contractors to fund cash kickbacks to themselves, knowing payments were inflated above the amount of any work performed. They knew that in numerous instances no work at all had been performed. Bernard and Brashear used their email accounts to facilitate this scheme.

Two contractors from whom Bernard and Brashear obtained substantial cash kickbacks were Jim P. Enterprises and New Beginnings Environmental Services, both companies hired to perform landscaping, snow removal, clean-up and sign-posting services, which were affiliated with Bernard but purportedly operated by James Porter. Bernard admitted receiving $409,823 in bribes and kickbacks from Porter’s companies, funded by inflated and fraudulently obtained payments from the NWCDC, during the period January 2008 to December 2012.  Bernard also admitted receiving approximately $85,000 from Essex Home Improvements, a contracting company operated by DeRosa, during the period January 2008 to March 2013, which he received either directly or indirectly through companies Bernard controlled. 

Bernard also admitted filing a U.S. Individual Income Tax Return, Form 1040, for tax year 2009, which did not include approximately $314,000 in unreported income he received in kickbacks.

Brashear pleaded guilty on Dec. 21, 2015, to devising a scheme to defraud the NWCDC as well as filing a false tax return by failing to report substantial income she received in connection with the kickback scheme. Among the approximately $1 million in kickbacks that Brashear admitted receiving were approximately $260,000 from James Porter and $27,000 from DeRosa. Porter pleaded guilty in January 2015 to conspiracy to defraud the NWCDC of honest services, money and property through the use of interstate wire transmissions, as well as tax evasion for his role in the kickback scheme.   

DeRosa admitted that from January 2008 to August 2012 he provided Bernard with a stream of payments totaling approximately $85,000 for Bernard’s action and assistance in procuring NWCDC roofing work for DeRosa’s company. DeRosa provided these payments to Bernard either directly, or to Bernard’s consulting firm, or to a Newark-based civic organization run by Bernard, the African American Heritage Parade Committee. DeRosa also admitted to laundering $20,000 of the money by having it paid to Bernard indirectly through intermediaries in order to disguise DeRosa or Essex Home Improvements as the source of the funds. Two intermediaries DeRosa admitted to using to launder funds provided to Bernard included a subcontractor doing work for DeRosa’s company and James Porter.

The Travel Act charges to which Bernard pleaded guilty each carry a maximum potential penalty of five years in prison; the charge of filing a false tax return is punishable by a maximum potential penalty of three years in prison. Under the terms of the plea, the sentences on all three counts to which Bernard pleaded guilty shall run consecutively. All charges are also punishable by a fine of $250,000 or twice the amount of the pecuniary gain from the offense.

The money laundering counts to which DeRosa pleaded guilty each carry a maximum penalty of 20 years in prison and a maximum fine equal to the greatest of $500,000;  twice the value of the property involved in the money laundering transactions; or  twice the gain or loss resulting from the offense.

Sentencing for both defendants is scheduled for April 7, 2016.

U.S. Attorney Fishman credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Richard M. Frankel; IRS – Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Housing and Urban Development, Office of Inspector General, Newark office, under the direction of Special Agent in Charge Christina Scaringi, as well as criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s guilty pleas. U.S. Attorney Fishman also thanked the N.J. Office of the State Comptroller, under the direction of Acting State Comptroller Philip James Degnan, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys Jacques Pierre, Mala Ahuja Harker, and Senior Litigation Counsel Leslie Schwartz of the U.S. Attorney’s Office Special Prosecutions Division.

Defense counsel:

Bernard: Thomas Ashley Esq., Newark

DeRosa: Anthony Pope Esq., Newark

Updated June 17, 2016

Public Corruption
Press Release Number: 16-004