Birdsall firm pleads guilty to criminal charges


An attorney representing Birdsall Services Group (BSG) today entered a guilty plea on behalf of the firm to charges of money laundering and making false representations for government contracts, according to the N.J. Attorney General’s Office.

Joseph Hayden, defense counsel for BSG, entered the plea in state Superior Court in Ocean County on June 13, agreeing to a deal with state prosecutors that includes $1 million in fines, penalties and restitution.

The move, according to BSG’s federally appointed bankruptcy trustee Edwin Stier, will allow the firm to move ahead with its sale of millions of dollars in assets to a California-based company.

“This guilty plea is an acknowledgement on behalf of the company of the serious wrongdoing that occurred and [it] accepts the consequences of those actions while still protecting the interests of the innocent employees, clients and creditors,” Stier said in a statement. 

“The agreement with the Attorney General’s Office will conclude this matter as it relates to BSG and permit the sale of the remaining corporate assets to a new company.”

In March, BSG and seven of its executives were indicted by the state on charges of campaign finance violations for allegedly funneling hundreds of thousands of dollars to political campaigns and organizations in exchange for public contracts.

The Attorney General’s Office has alleged that the illegal conduct occurred in multiple counties, including Monmouth and Ocean. The office has declined to comment on when, or if, charges would be brought against any public officials in relation to the BSG case.

On May 20, BSG and the seven defendants – including former CEO Howard Birdsall – pleaded not guilty in state Superior Court, rejecting plea deals that would have carried up to five years in state prison.

 Criminal charges against the remaining parties are still pending.

Under the June 13 plea agreement, the Eatontown-based engineering firm must pay the state $1 million in penalties, fines and restitution and will be barred from working on government contracts in New Jersey for 10 years, according to a statement from the Attorney General’s Office.

BSG must also “cooperate fully in the state’s ongoing investigation and prosecution of individual defendants who allegedly orchestrated or took part in the scheme.”

“With this plea, Birdsall Services Group has admitted that it made more than half a million dollars in illegal corporate political contributions and lied about them to secure public contracts for which it should have been disqualified,” said First Assistant Attorney General Thomas Calcagni in a statement. 

“This is a victory for the public and for all who believe that government contracts should be awarded fairly and openly, not handed to politically connected firms that pay for the privilege with campaign contributions.”

BSG filed for federal bankruptcy protection in March, after the state seized $41.6 million in BSG assets, including nearly $5.5 million in cash, claiming the funds were the proceeds of “criminal activity.”

More than 100 employees left the firm, while BSG was forced to furlough those remaining until it could reach a settlement agreement with the state on April 15.

Under that agreement, BSG agreed to surrender more than $2.5 million to the state under a civil forfeiture action and place an additional $1 million in an escrow account to pay any fines, penalties and restitution that could arise from the ongoing criminal action.

On June 5, a federal Bankruptcy Court judge approved the sale of BSG’s name, trademarks and other assets to California-based Partner Engineering and Science, Inc. for $5.6 million.

Under the purchase agreement, Partner will assume BSG’s accounts receivable, intellectual property, select existing contracts and other assets. The money, in addition to any funds generated by the sale of other BSG assets not included in the Partner deal, will go toward paying off BSG’s secured and unsecured creditors, Stier said.

According to a release from a BSG spokesman following the announcement of the sale, Partner plans on retaining “as many of [BSG’s] staff as possible,” and will pursue future government contracts in BSG’s existing service area.

The guilty plea, said state Division of Criminal Justice Director Elie Honig, serves as a message that the state will not tolerate abuses of campaign finance laws.

 “Justice demanded that this company not continue to profit from years of criminal conduct that unlawfully skewed the public contracting process in its favor,” Honig said in a statement. “We have achieved justice and sent a powerful message that we will not tolerate those who engage in criminal conduct to evade New Jersey’s pay-to-play rules.”

The next hearing for the seven defendants is scheduled for later this summer.