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New Brunswick Parking Authority Theft Scandal Continues to Unfold in County Courthouse

Judge Considering Motion to Throw Out Conviction of Two Ex-Employees
NB Parking Authority
The city's Parking Authority continues to deal with ramifications of widespread thefts first discovered by authorities in 2009. Charlie Kratovil

NEW BRUNSWICK, NJ—Yesterday, a county judge decided to postpone the sentencing of two former New Brunswick Parking Authority (NBPA) employees convicted in January of official misconduct for failing to report thefts by their fellow employees.

The two men convicted are Emil Hanna, who worked for the authority since 2001 and made $30,304 annually, and Emad Naguib, who worked for the authority since 2003 and made $26,872.

More than a year ago, two additional ex-employees were sentenced to jailtime for their participation in the thefts, and another was put on probation.  All three testified against Hanna and Naguib, who maintain they never stole from their employer despite facing longer sentences than those who did.

Attorneys for the two say their clients may have looked the other way while their fellow security employees engaged in regular theft of parking fees, but that they violated no law by failing to report the crimes.

"Is it bad judgment not to [report the thefts]?" asked defense attorney Joe Mazraani.  "Yes... But is it a criminal action when you're looking at a hard five [years in prison]?"

According to the state law governing official misconduct, "public servants" are required to report crimes they witness, but only if doing so is inherently a part of their job duties.

Hanna was a "security seargent" and Naguib was a "security guard."  Both were acquitted of all but the misconduct charge by a jury in January.

But they could still face as many as 10 years in state prison and must serve a mandatory minimum term of five years with no chance of parole, in what the judge referred to at one point as a "draconian penalty given we have armed robberies where people get less."

Meanwhile, the authority's former financial operations manager Michael Lapidus was required to reimburse the authority $24,000 in revenue from a parking garage that he allegedly never deposited in the bank.

His case was dismissed when he entered a pre-trial intervention program, leading to complaints about the prosecutor's handling of the case.

Yesterday afternoon, in the courtroom of Hon. Bradley Ferencz, attorneys for Hanna and Naguib argued that the charge for failing to report the thefts should have never been sent to a jury.

"To make somebody criminally responsible, you have to have a heightened duty," said Mazraani, noting that police officers, prosecutors, and other officials swear an oath to enforce laws, while the NBPA's security guard responsibilities were vague.

Within the parking authority, a separate enforcement division consists of six officers sworn to enforce parking regulations throughout the city and empowered to issue tickets to violators.

Defense attorney Jonathan Petty described the defendants as "two individuals who basically could not even touch money," citing the testimony of the Parking Authority's Executive Director.

The defense argued that Hanna and Naguib were security officers mostly responsible for helping customers use the payment machines and ensuring no one had unauthorized access to the garages.

Stopping widespread theft among their colleagues was not an explicit or inherent part of their job description, Mazraani said.

"The NBPA has recently implemented duties dealing with reporting thefts," said Mazraani, but said those reforms were not on the books when his client worked for the authority.

In fact, just a day before the sentencing hearing, NBPA Executive Director Mitch Karon introduced an updated version of the employee manual to the authority's board.

At the conclusion of the hearing, Ferencz announced he would take nearly three weeks to decide on the motion and produce a written opinion stating his decision.

"I have not decided the issue on whether or not there is an inherent responsibility... I think this is a substantial issue," Judge Ferencz said.

If Ferencz opts to throw out the charge, the men will be free pending a potential appeal from the county prosecutor's office.  If not, the defense attorneys say they will take the matter to a higher court.

Ferencz is scheduled to read his ruling on the motion into the record on May 16 at 9 a.m.

HOW THE THEFTS WERE DISCOVERED
In at least two city parking decks, security guards allegedly collected cash directly from parkers, bypassing the automated payment system and often keeping the payments for themselves.

Since the scandal began to unravel three years ago, the authority has abolished the practice entirely and switched to automated machines that also accept credit cards.

But at the time, it was a widespread practice during busy times of day at the authority's parking decks, particularly the Lower Church Street and Ferren Mall decks.

Alan Rockoff, then the Executive Director of the State Commission of Investigation, obtained information about discrepancies in the finances of the authority.  Rockoff sent a letter, along with the documentation that did not match the official records, to New Brunswick police.

City police promptly began looking into the missing money, but the authority's ticket scanning system and security cameras unexpectedly crashed.

Attorneys for the Hanna and Naguib have accused Lapidus, one of the highest-paid employees of the authority at the time, of sabotaging both systems in an effort to derail the police investigation.

Nonetheless, police managed to acquire videos covering three days at the affected decks that showed NBPA security guards collecting cash from parking deck users.

Authority employees were ready with an excuse.  On busy nights, they claimed to take cash from customers in order to make the lines flow faster.

During the trial, Parking Authority Executive Director Mitch Karon said this went against an unwritten order he had given Lawrence Sorbino.  But, according to other witnesses, the practice of taking cash directly from customers was a widespread one.

Three people have already pled guilty, and have been punished.  City residents Thevio Eliscar, a security supervisor and Hicham Saadi, a guard pleaded guilty along with Anthony Williams, who supervised and operated security dispatches, had pled guilty to theft and tampering with camera evidence.

Allegedly, Williams told security officers how and when to disable security devices, thus making the theft possible. William got three to five years' probation for his misdeeds.

Despite a seven-year sentence, Eliscar was imprisoned by New Jersey for just a few months, before he was paroled and forced to pay $45,000 to reimburse the Parking Authority.  Saadi was an inmate in Middlesex County's jail for four months on work release, fined $60,000, and given probation for three years.

ALLEGATIONS OF DIFFERENTIAL TREATMENT
The punishments for the crimes have received criticism for inequity.

There is a state program called the Pretrial Intervention Program (PTI), which attempts to rehabilitate first-time offenders through probation, dismissing the original charges and leaving the offenders without a criminal record. 

Lapidus, the high-ranking financial officer, was entered into this program despite being ordered to pay $24,000 back to the NBPA.

However, Hanna was blocked from the program, even though the amount he had been accused of stealing was only $700.

The county prosecutor considered Executive Director Karon to be the "victim" of the thefts, giving him some sway over who gets picked for PTI.

According to Karon, Lapidus was willing to pay back the money, and had a wife who worked for the Parking Authority.

But Karon stayed silent in January when he was asked by the HNT's Bob Makin why he did not recommend Hanna for PTI.

Karon, the authority's longtime Executive Director, hired Lapidus to the financial operations manager position in 1999.

Before his charges in the theft case, Lapidus was paid a salary of $81,808, according to MyCentralJersey.com's DataUniverse.  Karon makes more than $122,000 annually running the multi-million dollar authority.

In the trial, Karon was accused by both sides of failure to prevent theft from the garage ticket machines.  He was never charged, although statements and testimony, including his own, appear to implicate him in the events.

Karon's testimony itself is controversial.  According to Bruce Kaplan, the county prosecutor, Karon testified that he didn't know of any theft allegations before being asked by the New Brunswick police in May 2010.

According to Mazraani, Karon might not have been aware of specific thefts, but he was aware that his employees were violating agency policy concerning the handling of money, and he failed to fire the violators.

According to Karon's testimony, Lapidus was sloppy with the authority's money.  Witnesses in the trial said they saw money from parking machines in his pockets, and that Lapidus left cash in his office, put vaults full of coins in his personal car, and counted cash in his office rather than in the videotaped security rooms designated for that purpose,

Karon failed to report Lapidus' misconduct to the police, according to Mazaraani,who argued an official misconduct case against Karon, whose duties were more in line with sworn public servants, would be far stronger than that against his client.

In earlier testimony, Karon responded that he was unsure whether he himself could have faced criminal liability for failing to report Lapidus' suspicious activity.

Ferencz probed attorneys for both sides on the finer points of the case, but at one point asked a clarifying question that helped focus Mazraani's argument that his clients were no more responsible than higher-up officials who failed to reveal the thefts.

"Because if that were the case, Mr. Karon should have been indicted?" Ferencz asked.

The Home News Tribune (HNT) called Karon multiple times about the allegations, and Karon did not answer those calls.

NBPA Board Chairman Kevin McTernan, also an official with Robert Wood Johnson University Hospital, had no comment on the HNT's January 28 article when asked by NewBrunswickToday.com at a February board meeting.

Hanna and Naguib, who were acquitted of most of their charges, had been offered the opportunity to plead guilty to theft and spend 364 days in the county jail.  Under the deal, both defendants had to accept the offer, but one of them rejected the plea bargain.

Defense lawyers asserted that the prosecution had never told them that PTI had been granted to Lapidus, a relevant fact in the case.

Hanna's attorney Jonathan Petty argued that his client could have appealed the denial of PTI to the judge, if only he had been informed of Lapidus' deal by prosecutor Brian Gillet.

The two defense attorneys said they were informed of Lapidus' PTI status by an NBPA employee on the day before the trial.  Lapidus had been in the program for nine months at that point.

Lapidus was indicted by a grand jury and allegedly changed computer records while the thefts were ongoing in an effort to conceal the thefts.

Additionally, a seventh man arrested in the case, former security manager Lawrence Sorbino stands accused of accepting bribes to ignore the thefts.

Soribino's trial is expected to take place in the coming months.  He faces charges of theft, official misconduct, and various other violations.

SCANDAL FALLOUT CONTINUES
As the authority asserts in its literature explaining the city's parking laws, "We are here to enforce parking regulations. Our goal is NOT to prey on the public and take your hard-earned money."

The Parking Authority, whose five-member board is appointed by the mayor, recently 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.

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

After the HNT's Bob Makin exposed the preferential treatment given to the Lapidus, his replacement at the authority quietly left the position in February.

Karon said CFO Robert Kapp's departure was mutual.

A reliable source tells NewBrunswickToday.com that Karon was also asked to resign after the Home News story, though the source could not say who asked.

"Mr. Kapp was hired in 2010. Since that time the Authority has continued to grow," said Karon in an email to NewBrunswickToday.com.

"This growth has resulted in expanded financial and accounting demands and requirements," Karon continued.

"It was mutually agreed between Mr. Kapp and the Authority that a person with an extensive and in depth accounting background be brought in to lead the accounting department and to ensure all our governmental accounting requirements and obligations are met."

That person, Bright Rajaratnam, started working for the authority on March 4.

NewBrunswickToday.com asked the authority what they had done to prevent employee theft since the scandal erupted.

"We've taken any number of steps to increase the overall financial security of the authority's cash," Board Chairman Kevin McTernan said.  "We have a set of additional chekcs 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."

The new director of security Harry Delgado told the HNT there is now a clear 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 have been told not to accept bribes or cash, and they exclusively direct customers to automated payment machines, because of this newfound taboo, according to Delgado.

Delgado is a former South Brunswick police captain with two graduate degrees, an educator at Fairleigh Dickenson University, and manager of an accredition program for the NJ State Association of Chiefs of Police.

Delgado says he runs the security of the Parking Authority like a police department, holding regular meetings to discuss and improve policies and procedures.

A former NBPD and Trenton police officer Anthony Barber joined the authority's board in January.as we reported earlier this year.  Barber is the second career cop on the five-member board along with current New Brunswick Police Director Anthony Caputo who was appointed to serve in 2010.

CITY COUNCIL HESITANT TO COMMENT
City Council President Rebecca Escobar twice deflected questions about the matter at the February 6 Council meeting, referring questions to the Parking Authority board.

"At the parking authority board meeting, you might get the better answer than you'll get here," Escobar said with a laugh.

Pressed on the question because two of her fellow council members served on the board while the scandal was uncovered, Escobar still refused to provide answers.

"Like I said... They will address it better than here.  Maybe that's something that you could address at their board meeting," Escobar said.

Another resident spoke up and expressed disappointment in Escobar's deflection later that evening.  Weeks later Escobar was once again forced to address the issue by NewBrunswickToday.com

"I believe that [the HNT] interviewed Mr. Delgado," she said.  "I know what he said that they have instituted various measures to make sure that something like that never happens again and he was an ex-chief of police in South Burnswick... so I'm pretty sure that those measures have been in place right now."

She then offerred the floor to her fellow council members.

"Having served there or whatever, they're obviously being prosecuted to the fullest extent of the law," said former NBPA board member and current City Councilman John Anderson.

Kevin Egan, a former NBPA board member who left the board to replace his father on the City Council in 2010, declined to comment on the issue.

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