Aresident of Howell and a resident of Jackson were among four men charged in connection with a money-laundering conspiracy in Somerset County.
According to a press release issued by Somerset County Prosecutor Wayne J. Forrest earlier this month, the following individuals were arrested: Robert E. Titus Jr., 52, of Jackson, John Paris, 60, of Middletown, Edward G. Beach, 52, of Toms River, and Gabriel Caponetto, 50, of Howell.
Titus has been charged with first-degree money laundering, third-degree money laundering, second-degree theft by deception and second-degree conspiracy to commit money laundering and theft by deception.
Paris has been charged with first-degree money laundering, third-degree money laundering, second-degree theft by deception and second-degree conspiracy to commit money laundering and theft by deception.
Beach has been charged with first-degree money laundering, third-degree money laundering, third-degree forgery and thirddegree uttering forged instruments.
Caponetto has been charged with thirddegree money laundering.
Forrest said the charges stem from a investigation that was conducted by the Somerset County Prosecutor’s Office Special Investigations Unit.
He said the investigation began in December 2008 after Aramark Corp. representatives and Bernards Township School District officials jointly reported an alleged long-term theft from the district perpetrated by an employee of Aramark.
Since 1999, Aramark has been the successful bidder for the Bernards Township School District contracts to provide food services, janitorial services, and manage the maintenance of their facilities as well as to serve in a general contractor-like role to complete special projects, repairs and facilities upgrades.
Aramark assigned an on-site manager who had offices at Ridge High School to manage the maintenance of the facilities and to oversee the completion of these various other projects performed mostly by outside subcontractors. Titus had worked for Aramark since 1992 and became the onsite manager at Bernards Township in 1999.
Forrest said Titus was then able to hire contractors to complete various construction type projects throughout the school district without the school district having to obtain bids. In addition, at least one of the primary contractors hired by Titus, John Paris Construction, also functioned essentially as a general contractor and in turn hired other subcontractors to perform work without following a bidding process.
Forrest said the investigation revealed that in July 2008 the new business administrator for the Bernards Township School District began noticing inconsistencies between the invoices that had been submitted for payment by Titus through Aramark and the actual work that had been performed in the school district.
The business administrator then notified the superintendent of schools for Bernards Township who confronted Titus regarding the invoice inconsistencies. The prosecutor said Titus left the district at that time.
Aramark then began its own internal investigation regarding Titus’ activities while at the Bernards Township School District. An internal audit conducted by Aramark and subsequently turned over to and reviewed by the Special Investigations Unit of the prosecutor’s office revealed a theft from overbilling of approximately $2.1 million from the Bernards Township School District from January 2003 until October 2008.
Forrest said that as the investigation continued, it was discovered that Titus had primarily used the same contractor since 2003 for all construction projects, repairs and maintenance. That contractor, Paris, is the owner and operator of John Paris Construction, a construction business in the Belford section of Middletown.
Paris at times completed some school projects or hired other subcontractors to perform the work. Paris then submitted invoices to Titus that would be processed by Aramark and ultimately submitted to the school district for payment.
However, unbeknown to Aramark, the invoices had been inflated, allegedly by Titus, to allow him to receive money to which he was not entitled. Authorities are alleging that the difference between the actual non-bid cost of the project and the inflated amount paid by the school district was given to Titus by Paris as a kickback for providing Paris with a steady stream of construction jobs at the Bernards Township School District.
Forrest said the investigation revealed that Paris would deposit the inflated payment checks he received into his business account. Paris is alleged to have done this in order to mask the theft of funds and disguise the transmission of money back to Titus. Two separate schemes, authorities said, were employed by the defendants using a check-cashing store where another defendant, Beach, was employed as a manager in Hazlet.
The first scheme involved John Paris Construction checks that were made payable to cash and subsequently transmitted by a third party to Caponetto.
It is alleged that Caponetto would add or substitute his company’s name, GMC, on the payee line, endorse the checks, obtain the money and ultimately remit the money to this third party for Titus’ benefit. It is alleged that Caponetto received $100 for each of the John Paris Construction checks that he cashed.
The second method allegedly employed by Titus and Paris also involved checks that were written by Paris on his John Paris Construction account. Several checks were written on the same day or on days in close proximity to each other. The amounts of the checks were under the $10,000 amount that would trigger a currency transaction report to be filed by check cashers and banks. The payee line on the checks was left blank.
It is alleged that once these checks made their way to the check-cashing store, Beach accessed the computer database of the check-cashing company that contained the identifying information of the store’s client base. Beach then chose an existing client at random and their name was entered on the check as the payee without the knowledge of the client whose name was used. Since the database contained a photograph and identifying information such as a driver’s license number and address of the client of the store, there was no need to record that information again.
Therefore, it appeared that the check was negotiated by the client, when in fact it was not. It is alleged that Beach received a portion of the check-cashing fee that was charged for the negotiation of each check. The total amount of John Paris Construction checks cashed at the check-cashing store between September 2005 and September 2008 was approximately $706,735. Caponetto cashed approximately $124,860 worth of those checks.
Forrest said the detectives discovered that the proceeds from these checks were used primarily to pay off Titus’ gambling debts.
Forrest said the Bernards Township School District was reimbursed by Aramark Corporation earlier this year for what is believed to be the entire amount of the theft that was allegedly perpetrated by its employee, Titus, and his co-defendant Paris. Any additional potential financial loss to the school district is unknown. The appropriate state agencies, including the New Jersey Attorney General’s Office, Division of Law, have also been contacted and are independently reviewing this matter as well, according to Forrest.
All of the defendants voluntarily turned themselves in to authorities Feb. 2.
Forrest said bail has been set for the defendants by Superior Court Judge John H. Pursel. The bail for Titus was set at $150,000 cash or bond. The bail for Paris was set at $100,000 cash or bond. The bail for Beach was set at $100,000 cash or bond and the bail for Caponetto was set at $10,000, with a 10 percent cash alternative.
Titus was lodged in the Somerset County Jail when he failed to post bail, according to the information provided by the Somerset County Prosecutor’s Office.