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Prosecutor: NBPA Valets Sold Spaces in Abandoned County-Owned Parking Garage and Pocketed The Cash

Fired Valets Once Parked Cars For Patrons at Frog & The Peach and Delta's Restaurant, Now They Face Bribery and Conspiracy Charges For Buying Silence of Others
NBPA headquarters
The NBPA has been rocked by yet another corruption scandal. Charlie Kratovil

NEW BRUNSWICK, NJ—The more things change, the more they stay the same.

County prosecutor Andrew Carey announced on April 7 that four New Brunswick Parking Authority (NBPA) employees were arrested on charges of conspiracy, bribery, and theft.

The revelation means that a total of eleven men working for the authority have now been charged with crimes related to their office since 2010.

Also involved in the announcement was the New Brunswick Police Department (NBPD) and its controversial double-dipping Director Anthony Caputo, one of five members on the powerful NBPA Board of Commissioners.  The Middlesex County Prosecutor's Office (MCPO) made no mention of Caputo's service on the board.

Each board member is appointed by Mayor James Cahill, whose office had "no comment" on the latest corruption scandal to take the city by storm.

"No, we don't have a comment from the Mayor's Office," said Jennifer Bradshaw, Cahill's spokesperson.

The four young men arrested all worked as valets at Delta's and the Frog and the Peach, downtown restaurants that depend on the NBPA for valet parking.

According to the MCPO, the four men "conspired to sell parking spots to motorists, who were allowed to park at the Wolfson parking deck, which is closed and earmarked for demolition."

However, the NBPA has contradicted the MCPO, saying it re-opened the deck, which was sold to the county for $4.75 million one year earlier.  It's not clear if the county was ever notified that the NBPA was re-opening the vacant garage.

It's also not clear how long it took authorities to figure out what was going on, but the thefts began on a busy night for restaurants, February 14, according to the MCPO.

County Administrator John Pulomena did not return a phone call to his office regarding the conspiracy.

According to the NBPA's attorney, the Wolfson deck was closed at the end of 2015, but was "reopened in February due to restaurant valet parking storage demand."

It also remains to be determined how much money was pocketed, when the NBPA first learned of the wrongdoing, and how quickly law enforcement became involved after that.

It's the second time in six years that a cluster of NBPA employees were busted by law enforcement for stealing from the public agency, raising questions about the authority's culture of corruption.

In 2010, the MCPO charged seven men including the agency's Financial Operations Manager in a number of theft crooked schemes that appeared to be widespread.

Three men, all of them security guards, pleaded guilty and served time for pocketing cash that customers paid as they exited the Ferren and Church Street garages on busy nights.

One supervisor was also convicted and jailed, but the higher-up was given a favorable deal that kept him out of jail and allowed him to re-pay the NBPA $24,000 in stolen funds.

NEW SCAM MADE USE OF CITY'S OLDEST PARKING DECK

"It’s not déjà vu, it’s the New Brunswick Parking Authority," wrote journalist Sergio Bichao.

Six years after the original scandal broke, and a few blocks away, the four valets were allegedly involved in a "conspiracy," taking cash from customers to park their cars illegally in the county-owned garage on Neilson Street.

Uncertainty over the future of a downtown parking deck, and perhaps youthful indiscretion, led to the scam, which allegedly involved an illegal cash-only operation.

NBPA Executive Director Mitch Karon said that the men were fired a week prior the MCPO announcement of the charges.

However, information provided by the authority contradicts that statement, instead saying that three of the four suspects were fired nearly a month before the criminal charges were announced, raising questions about why law enforcement waited to make the case public.

Typically, police announce corruption cases shortly after, and sometimes even before, arrests have been made.

But in this case, the defendants had long been fired, and, in one case, jailed and released on bail several days before the MCPO announced the criminal charges.

ONLY FOUR YOUNG MEN ALLEGEDLY INVOLVED IN BIG SCHEME 

Three of the four valets, two from South Brunswick and one from Franklin, were also accused of paying bribes to other NBPA employees to keep the thefts a secret:

  • 18-year-old Atis Mir-Merced (Kendall Park)
  • 24-year-old Joshue Castillo-Mendoza (Kendall Park)
  • 25-year-old Karran Buchhan (Somerset)

The three each face charges of bribery, conspiracy to commit bribery and conspiracy to commit theft. 

According to the MCPO, the three men paid money to the other unidentified public employees "in exchange for their silence on the parking conspiracy."

"The amounts of the bribes and payments for parking spaces have yet to be determined," reads the MCPO release.

For its part, the NBPA refused to say which of its employees accepted bribes, or confirm if any other employees have left the agency in connection with the conspiracy.

"The NBPA cannot respond to this question at this time as this is a continuing law enforcement investigation," wrote their attorney. "At the time that the appropriate law enforcement officials have completed their investigation and if individuals are charged with a criminal offense, it will become a matter of public record."

The fourth employee, 22-year-old Ferrad West, of East Brunswick, was only charged with a single count of conspiracy to commit theft.  He was fired on April 1, according to the NBPA.

Bail was set at $2,500 for West, $7,500 each for Mir-Merced and Castillo-Mendoza, and $10,000 for Buchhan.

Castillo-Mendoza was jailed for one night on April 4, having been fired nearly a month earlier.  All but West were fired nearly a month before their arrests were announced, on March 8 and 9, accoring to the NBPA.

According to the Middlesex County Jail's records department, the other defendants have not yet been to the jail, perhaps because they posted bail right away.

All four were hired during 2015 and paid  $8.38 per hour.  It's not clear if they earn tips on top of that.

The NBPA's boss told his board on August 26 that the authority was "looking into a new valet system," known as "TDZ-SMS," one that would be used "at the Heldrich [Hotel], Frog & The Peach, Delta's, and special events like Rutgers University football."

The system costs the NBPA $700 per month to use, $350 for the Dennis Street restaurants and another $350 the Heldrich Hotel.

According to the MCPO statement, "parking authority officials learned of the thefts" and contacted the New Brunswick Police Department (NBPD).

The prosecutor's office, which was criticized for how it handled the first rash of thefts, reported that the latest misconduct was "uncovered through an anti-theft policy that was established by the parking authority."

COUNTY PROSECUTOR REMAINS SECRETIVE, REFUSES TO ANSWER QUESTIONS

Through spokesman James O'Neill, Prosecutor Carey failed to respond to New Brunswick Today's questions about the latest NBPA conspiracy.

Ever since NBT reported on the case of Scott Campion in February, this community newspaper has been getting the cold shoulder from the county's top cop.

Carey refused to say why no higher-ups were being charged in this scheme to defraud the county.

As we previously reported the parking garage has been traded back and forth as a bargaining chup between the Middlesex County government and the NBPA for years to help balance each other's budgets.

And as reported in The Trentonian, New Brunswick Today has apparently been blacklisted by Carey's agency, and denied access to press statements on breaking news, criminal cases, and consumer alerts.

Started in 2011, New Brunswick Today has quickly become the most popular source of news in the Hub City, and the MCPO was one of the first public agencies to recognize NBToday as a legitimate news outlet.

In a move that this reporter called "childish," the MCPO has declined to issue its press releases directly to New Brunswick Today reporters.  It was the second time in two years that NBT reporters had been yanked from the agency's media list without explanation.

After a June 2013 article about a murder in New Brunswick pointed out an error in a MCPO release, the Prosecutor's Office removed this reporter from their press list.

New Brunswick Today spent the rest of 2014 unsuccessfully battling the MCPO to get back on the list. The MCPO also began prosecuting this reporter on criminal charges that were later dismissed.

Finally, after an in-person encounter with Prosecutor Andrew Carey, New Brunswick Today was added back to the agency's press list on January 5, 2015, only to be removed again thirteen months later.

OLD SCAM LED TO CHARGES AGAINST NBPA'S THEN-CFO 

Back in 2010, the Parking Authority was in the grip of a massive theft scandal, one that cost a top official his job.

Michael Lapidus, the NBPA Financial Operations Manager, appeared to recieve favorable treatment as he was given access to a pre-trial intervention (PTI) program that kept him out of jail even as he agreed to re-pay the authority some $24,000.

"I never admitted to taking any monies," Lapidus told New Brunswick Today.  "I did what I was advised to do by my attorney."

Lapidus was later hired by one of the contractors that the NBPA frequently used, and his wife still works at the authority.

"We are here to enforce parking regulations. Our goal is NOT to prey on the public and take your hard-earned money," reads NBPA literature from that time.

The NBPA also hired Standard Parking, a parking consultant to do a thorough audit of all of the Parking Authority's systems and procedures and to make recommendations for stemming revenue losses from theft.

The NBPA also switched their financial auditing firm from Samuel Klein & Company, to Withum, Smith & Brown.

After the Home News Tribune's Bob Makin exposed the preferential treatment given to the Lapidus, his replacement, Robert Kapp, also quietly left the key position.

Lapidus joined the NBPA in 1999, nine years after his future wife Holly Williams, who still works at the authority to this day.

Michael Lapidus was accused of stealing about $24,000 over a couple of years after law enforcement started looking into the agency's financial controls.

The Police Department, along with the Parking Authority, were following up on claims made by the NJ State Commission on Investigation about possible thefts.

In May and June of 2010, just as Mayor Cahill was securing a sixth term in office, the police hit pay dirt: they busted five security officers and a security manager, charging them with deception and the pilfering of about $250,000.

The Parking Authority fired them all over the accusations of widespread theft over the course of three years beginning in 2007.

At least three of the officers pled guilty, leading to them agreeing to repay at least $110,000 to the Authority and go to prison.

More heads would roll, as prosecutors secured an indictment against Lapidus on unrelated theft by deception charges.

The Authority fired Lapidus, along with its parking system auditor.  But within a couple years Lapidus had been hired by a private contractor, Precision Timing Systems, that worked with the NBPA.

Karon also pushed successfully for Lapidus to be offered PTI, something he did not do for other defendants who had been caught stealing from the NBPA.

The authority hired two companies, parking facilities specialist firm Standard Parking, and auditing firm WithumSmith+Brown, to review revenue control, auditing, and cash procedures. WithumSmith+Brown also became the new system auditor.

The Authority had to study the two reviews and perform other assessments, taking several months to put in place a system of revenue control, auditing, and operations to be used throughout the Parking Authority.

"We've taken any number of steps to increase the overall financial security of the authority's cash," NBPA Board Chairman Kevin McTernan said in 2013. "We have a set of additional checks and balances, we have additional oversight of the people who are responsible for maintaining the cash accounts."

"We changed auditing firms, we obviously replaced a number of staff members. And I think we've done a lot of due diligence in keeping sure that we control the authority revenues in a way that is appropriate."

The NBPA also hired a new Security Director, Harry Delgado, who brought with him a law enforcement background and implemented a policy and standard practice for handling money.

Delgado said that only people from departments entitled to touch cash or money can do so. Delgado also said that the Parking Authority requires all of its staff to take ethics training, and that it has tightened the policies in order to prevent theft from occurring again.

Only the Cashier Department is allowed to have or handle cash, or to audit it. All money is accounted for, Delgado said, and deposits must now be signed off with two signatures.

Security officials were told not to accept bribes or cash, and they exclusively direct customers to automated payment machines, because of this newfound taboo, according to Delgado.

SECRECY AND BRIBES TO KEEP QUIET NOT A NEW CONCEPT AT NBPA

NBPA Supervisor Lawrence Sorbino testified that he took $5,000 in bribes to keep quiet about the thefts that were going on in the 2007-2010 conspiracy.

Sorbino's trial was saved for last as the cases played out inside the Middlesex County Courthouse in 2012.  He was eventually convicted, and an appeal failed.

So, perhaps it is not suprising that the young men involved in the latest scandal tried to do the same thing to avoid being busted.

However, the bribes only made things worse for them, allowing police and prosecutors to charge the men with much more serious offenses.

Karon and the NBPA's attorney Leonard Bier declined to identify the employees who accepted bribes.

"The NBPA cannot respond to this question at this time as this is a continuing law enforcement investigation," wrote Bier on April 8. "At the time that the appropriate law enforcement officials have completed their investigation and if individuals are charged with a criminal offense, it will become a matter of public record."

Keeping things quiet seems to be part of the culture at the NBPA.  As we reported, Bier refused to publicly disclose the other parking authorities where he works in February.

Karon, who has led the agency since 1996, relied on a brief three-sentence statement that addressed none of the questions asked by this reporter.

"The system we've put in place to catch any improprieties has proven itself to work," said Karon, who was able weathered the storm of the prior scandal without being indicted or fired.

"Through the vigilance of our staff and our partnership with the New Brunswick Police Department, we were able to quickly act on this information," Karon continued. "The New Brunswick Parking Authority takes these allegations very seriously and remains dedicated to providing the finest service possible to our customers."

FIRST SCANDAL PLAYED OUT IN COURT FOR MANY YEARS

State appeals courts sided with the MCPO in two different cases related to the old NBPA scandal this February, just days before the new scandal got started.

As we reported at the time, Judge Bradley Ferencz, who has since stepped down, had originally ruled in favor of two NBPA security guards who were convicted of official misconduct.

Ferencz threw out their conviction on the grounds that the guards did not have a "clearly inherent" duty to report the thefts of their fellow NBPA workers.  The men had been acquitted on all of the ten remaining charges they had faced during a 13-day trial.

Since the 2010 arrests, the NBPA had taken action to implement new a employee manual that specifically required their workers to report thefts they witness.  It also renamed its security division "parking services," and re-framed the security guard position as a customer service job.

This February, however, an appeals court re-instated the conviction of Emil Hanna and Emad Naguib, finding that people in their position did have a "clearly inherent" responsibility to report thefts of their fellow employees under the official misconduct statute.

Just days later, the same appeals court sided with the MCPO in upholding his conviction of Sorbino, whose attorneys had argued his statement to investigators should have been thrown out because he had not been read his rights before making it.

Ferencz also presided over Lawrence Sorbino's conviction.  In this case, the appeals court upheld Ferencz's decision.

The post-scandal reviews also kept the Parking Authority from finishing its annual financial audits on time, with the 2010 financial statement audits being handed in on June 14, 2012. The authority's auditor handed in this work to the Authority, and the authority Board of Commissioners okayed the report on June 21 of that year.

However, according to the authority, the 2007-2010 thefts failed to hurt the organization in any substantial way, and it felt that the new approaches would deter future thefts.

The scandal was mentioned in the Official Statement offering the nearly $40 million City Guaranteed Parking Revenue Refunding Bonds for 2012.

CURRENT PLAN CALLS FOR REPLACING DECK WITH SMALL PARK

In 2013, the NBPA first tried to close the Wolfson deck, the city's oldest garage, but changed their minds as plans for the site evolved.

Now, city Planning Director Glenn Patterson wants to use federal funds to replace the Wolfson deck with a park. 

The county purchased the garage from the NBPA in 2014 for $4.75 million, but the NBPA continued to run it on a limited basis.

On July 25, 2014, McTernan responded to a question about what would happen at the Wolfson parking deck, or as it is now known, "the scene of the crime."

"I don't know exactly what's going to happen there right now," McTernan said at the time. "I know we want to go ahead and... as soon as a decision has been made about what the best use is, we'll be here to talk about it."

Karon explained at the time that the deck was costing the authority more to maintain than it was worth.

“The deck is close to 50 years old and is costing more and more money each year to maintain,” Karon told New Brunswick Today that summer. “An engineering firm came in and decided that it is better off being demolished. The cost to keep it open is outweighing the value.”

In 2015, the city government allocated $238,198 in federal Community Development Block Grant (CDBG) funding towards designing a new downtown park to replace the aging parking structure.

The allocation amounted to about one-quarter of the city's total CDBG allocations in their 2015-2016 Action Plan, even though the park would be in one of the three census tracts citywide that do not qualify as low or moderate income.

"Development projects such as the Neilson Street Park and supportive needs housing are to be developed in [low/moderate income (LMI)] areas," reads the action plan.

But the city argues the park will benefit people who live beyond downtown.

"The park will serve an area where residents are predominantly low and moderate income, with about 75% of residents being in this income category," explained Patterson.

"Eligibility for CDBG funding is based on the service area the facility will serve. The service area is the area in walking distance to the park; about 1,500 feet," said Patterson, adding that it would include "several affordable housing developments," such as including Fricano Towers, Riverside and Hope Manor.

However, Patterson has declined thus far to give any details of who would own or maintain the space.

"All those details have yet to be worked out," said Patterson.

"I'm sure people from all over town are hopefully going to go to this park."

UPDATE (4/13): This article was updated to include a quote from Michael Lapidus and to correct an inaccurate statement about his case.