NEW BRUNSWICK, NJ—The man in charge of the finances for the city’s school district quietly filed for bankruptcy in January, claiming he and his wife were over $1.6 million in debt, despite his $230,454 annual salary.
Richard Jannarone has been the New Brunswick school district’s business administrator for 17 years, but he also owns many failed side businesses.
Jannarone has also been a central figure in a controversial deal to transfer a public school to a private developer to make way for a cancer hospital.
He and his wife filed their “Chapter 7” bankruptcy petition on January 20, but their case has been held up by the ongoing coronavirus pandemic.
On March 24, the couple’s bankruptcy petition was granted in federal court, putting them on their way to getting off the hook for much the debts.
Later that day, Richard Jannarone presented the $233 million budget he had crafted to the Board of Education in a public teleconference.
Board of Education President Diana Solis also did not respond to multiple inquiries about the bankruptcy.
Jannarone first joined the school district payroll in 1999, under Superintendent Ronald Larkin, whose 2004 retirement payouts were documented in a report by the State Commission on Investigation that suggested “deliberate steps” were taken to inflate Larkin’s pay and pension.
Jannarone stayed on as Business Administrator throughout the entire term of his next boss, Richard Kaplan, and has remained in power under a third administration.
New Brunswick’s current Superintendent of Schools, Aubrey Johnson, did not respond to requests for comment on the Jannarones’ bankruptcy, or his history of failed businesses.
In December, the school board voted to give a raise to Superintendent Johnson, retroactively upping his salary to $245,000 per year, effective back to November 1.
The bankruptcy comes amid not just the pandemic, but an unprecedented controversy over a proposed school sale.
Since Jannarone joined the district, it has twice partnered with the New Brunswick Development Corporation (DEVCO) to build new schools, but now that same developer wants to demolish a city school for its next development project: an expansion of the Rutgers Cancer Institute of NJ.
Until now, it had not been known to the general public that, while he was negotiating the school sale with DEVCO, Jannarone’s personal finances were collapsing after one of his failed businesses got sued.
The Jannarones’ bankruptcy filing characterizes their $1,673,796.39 owed as “primarily business debts,” and it does appear the couple has a number of failed businesses in their portfolio.
An attorney who filed the bankruptcy petition for the Jannarones declined to comment on the record about the matter.
The Jannarones, who purchased a home in Monmouth County for $735,000 back in 2005, also listed an additional $798,061.17 in assets on the bankruptcy petition.
Their Millstone home, a 40-minute drive from New Brunswick, was only valued at $525,000 in the bankruptcy petition.
Longtime Board of Education Attorney George Hendricks represented the Jannarones in selling their previous home, according to property records.
The couple also claimed to own four vehicles, including a leased 2020 Acura TXL, a 2018 BMW X5, and 2004 Mercedes SL 500 Roadster.
Among the other assets declared were $11,225 in furniture, $6,405 in jewelry, $2,000 in clothing, and $1,000 in “cell phones, laptop, I-Pad, Televisions, and X-Box.”
The couple valued their three dogs and two cats at just $200, according to the paperwork.
Their federal filing lists names of eight home-based companies that are owned by the Jannarones, including some whose names suggest they were looking to break into the marijuana business here in New Brunswick.
The couple owns 100% of Hub City Cannibis, LLC, Brunswick Alternative Treatment Center, LLC, Cannibis Enterprise Solutions, LLC, and Canna Med of NJ, LLC, among other businesses, but declared $0 in assets for each.
Two other companies owned entirely by the Jannarones had less than $20 in assets: Paradise Pools, LLC had $17.08, and Jananrone Enterprise Solutions, LLC had just $15.14.
The other companies owned by the Jannarone include Cousins Cleaners, a dry cleaning business in East Windsor that the Jannarones co-owned with another couple.
However, that company was notably absent from the ethics disclosure forms Richard Jannarone filed in 2018.
The business closed in June 2017 after less than two years in the East Windsor Town Center on Route 130. In September 2019, the landlord sued the Jannarones and the other owners of the company seeking $13,023.47 in unpaid rent.
Just a few weeks later, Jannarone met with Chris Paladino of New Brunswick Development Corporation to discuss their desire to purchase the Lincoln Annex School.
On October 11, Jannarone and two other men who don’t live in New Brunswick got together at DEVCO headquarters to discuss the plan to sell the Lincoln Annex School in exchange for the promise of a new school building to be constructed at a later date.
Also present for that private discussion was Cream Ridge resident Frank LoDolce, who–like Jannarone–was ostensibly there on behalf of the city’s school system.
They did not bring an attorney with them as they met with Lambertville resident and DEVCO President Chris Paladino, a power-player with a law degree who was paid $714,935 to lead the non-profit real estate developer in 2018.
As we reported previously, Jannrone is now using the coronavirus and new changes to the state’s public records law to conceal emails that would have shown just how far back his private conversations with DEVCO date.
Jannarone acknowledged having a self-described “clandestine” meeting only after it was revealed by Board President Diana Solis, but he has refused to admit who he met with that day.
Come January, he and his wife filed the bankruptcy petition, acknowledging owing $30,022.88 to the landlord in East Windsor, but that was just a small fraction of their total debts.
By far, the creditor they were the most indebted to was WSFS Bank in Wilimington, Delaware, to which they admitted owing at least part of a $698,994.01 debt. In second place was Atlanta-based Kabbage Program, to which they were responsible for at least a portion of a $79,236.92 debt.
The paperwork acknowledged that Richard Jannarone worked for the Board of Education for 21 years, and listed Rachel Jannarone’s employer as Abel Educational Staffing, LLC, yet another company based out of their home. The petition said she had been working there for eight months.
The company appears to be the same one referred to as Abel Educational Services, LLC, on Richard Jannarone’s April 20, 2020 ethics disclosure statement.
Rachel Jannarone owns that company, which according to the bankruptcy petitions “may be entitled to approximately $10,000 in commissions [but] has approximately $16,000 in debt.”
Richard Jannarone did not respond to an emailed request for comment on the bankruptcy case. He also has not responded to requests for notification of the next board meeting under the board’s policies, nor has he responded to a request to speak at their next meeting under the board’s policies.
The last time Jannarone substantively responded to the author of this article came during the April 28 Board of Education meeting, conducted on the telephone.
“There’s not one board member who will make one nickel off of any transaction, okay?” said Jannarone, getting emotional over this reporter’s remarks about the Lincoln Annex School deal being rushed through.
“It’s pretty clear to everyone that you’ve just been a contrarian to this board for the last 10 years. You’ve taken every opportunity to contradict everything we do,” Jannarone declared.
The Board of Education will be holding a telephone conference meeting on May 12 at 7pm, and New Brunswick Today will broadcast the meeting .
Editor’s Note: The author of this article has been a vocal opponent of the sale or closure of Lincoln Annex School since September, and recently filed a civil lawsuit against the Board of Education for violations of the Open Public Meetings Act.