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Theft of $600,000 worth of quarters leads to charges December 14, 2009

Posted by jefhenninger in News.
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New Jersey Attorney General Anne Milgram announced that John P. Corea, former director of the Hoboken Parking Utility, was indicted on charges that he conspired to steal more than $600,000 in parking meter revenue that he allegedly split with a Toms River contractor whose company was hired by the City of Hoboken to collect coins from city parking meters.

According to Criminal Justice Director Deborah L. Gramiccioni, Corea, 45, of Hoboken, was indicted today by a state grand jury on charges of conspiracy (1st degree), financial facilitation of criminal activity (money laundering) (1st degree), official misconduct (2nd degree), theft by unlawful taking (2nd degree), and misapplication of government property (2nd degree).

The contractor, Brian A. Petaccio, 49, of Toms River, owner and president of United Textile Fabricators LLC of Toms River, pleaded guilty on Sept. 30 to an accusation charging him with second-degree theft by unlawful taking for stealing more than $1.1 million in coins from Hoboken’s parking meters.

Corea allegedly used his official position to steer three separate no-bid contracts to United Textile Fabricators in November 2005 to collect the coins, count and manage them, and maintain the city’s parking meters. United Textile Fabricators is a coin-operated arcade game manufacturer.

After an audit in 2007 uncovered parking revenue shortfalls, Petaccio and his company returned approximately $575,000 to the city. However, Petaccio admitted in pleading guilty that he conspired with an official of the City of Hoboken – whom he did not name in court but had previously identified to investigators – to divert an additional sum, in excess of $600,000, which was never reported to the city and which the two men split. It is alleged that Corea is the official who conspired with Petaccio and split the money with him.

“Corea used his authority to steer three no-bid contracts to Petaccio, who admitted that he stole more than $1.1 million from the city, including funds in excess of $600,000 that he allegedly split with Corea,” Milgram added.

Under his plea agreement, Petaccio must pay $300,000 in restitution to the city and faces up to seven years in state prison. He must cooperate in the ongoing investigation by the Division of Criminal Justice and the New Jersey State Police.

It is alleged that while Corea was director of the Hoboken Parking Utility, he improperly solicited Petaccio and United Textile Fabricators LLC and subsequently used his official position to assist the company in obtaining the three no-bid contracts. Each contract was for approximately $27,000 per year, just under the relevant statutory threshold at the time of $29,000, above which public bidding would have been required, allowing other companies to compete for the work.

Between June 2005 and April 2008, Corea allegedly conspired with the company to steal and launder more than $600,000 in parking meter revenues, while continuing to use his official position to assist United Textile Fabricators and conceal its illicit activities. The company’s contracts with the city were effectively terminated by April 2008.

The principal business of United Textile Fabricators is the manufacture, sale and leasing of arcade crane games, coin-operated machines with a crane-like claw that the player uses to try to grab a toy. The company installs its arcade machines in businesses throughout New Jersey, Pennsylvania and Delaware. The proceeds from the machines, which are shared with the company’s clients, are collected by company employees and transported to the company’s warehouse in Toms River where they are counted and bagged for deposit into the company’s main operating account at a local bank. The state’s investigation determined that coins from Hoboken’s parking meters were commingled with coins from the company’s arcade machines and deposited in one lump sum into the company’s operating account, concealing the source and ownership of the funds.

In pleading guilty before Superior Court Judge Francis R. Hodgson in Ocean County on Sept. 30, Petaccio admitted that he knowingly withheld from the City of Hoboken approximately $575,000 in parking meter revenues and misappropriated those public funds to pay a variety of personal expenses and business expenses unrelated to the company’s meter collection activities on behalf of the City of Hoboken. The state’s investigation determined that those personal expenses included credit card bills and car payments for a Porsche and a Mercedes. Petaccio and his company ultimately returned these funds to the city in several installments between October and December 2007, following an audit and inquiry by the city’s financial consultants and outside accountants.

However, it is alleged that, in addition to the $575,000 that Petaccio returned the city, he and Corea conspired to steal additional funds exceeding $600,000, which were never reported to the city. The two men allegedly worked out a scheme in which Petaccio reported to Corea the amount of coins collected each day, and Corea would tell him how much to put aside as the “take” to be split between them.

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