Feb.02, 2010, 12:04 PM

About $2.1 million was stolen from the township school district in an elaborate, long-term money laundering scheme that lasted from 2003 through October 2008.

Four New Jersey men have been charged in the theft, which involved overbilling in construction projects and other operations, according to the Somerset County Prosecutor's Office. A press conference was scheduled on Tuesday morning in Somerville where more details were to be released.

Charged were with the crime were Robert E. Titus Jr. of Jackson, John Paris of Belford, Edward G. Beach of Toms River and Gabriel Caponetto of Howell. Somerset County Prosecutor Wayne Forrest said all four defendants were expected to voluntarily turn themselves into detectives Tuesday.

Forrest said that earlier this year the school district was reimbursed by the Aramark Corporation - a national firm that provides maintenance of school facilities and food services - for what is believed to be the entire amount of the theft perpetrated by its employee, Titus, and his co-defendant, Paris. The exact amount of reimbursement was not listed in the press release, which said that "any additional potential financial loss to the school district is unknown.''

Forrest said the charges stem from a more than a year-long investigation that was conducted by the Prosecutor’s Office Special Investigation’s Unit.  The investigation consisted of numerous interviews, the execution of several search warrants, the obtaining and review of a voluminous amount of documents and countless hours of investigation.

Forrest said the investigation commenced in December 2008 after Aramark representatives and township school  officials jointly reported an alleged long term theft perpetrated by an employee of Aramark from the district.

Since 1999 Aramark was the successful bidder for district contracts to provide food services, janitorial services and manage the maintenance of its facilities and to serve in a "general contractor-like role'' to complete special projects, repairs and facilities upgrades. Aramark assigned Titus as an on-site manager with offices at Ridge High School to manage the maintenance of the facilities and oversee the completion of other projects performed mostly by outside subcontractors.

Titus, who worked for Aramark since 1992, became the on-site manager in Bernards in 1999. He was then able to hire contractors to complete various projects throughout the schools without the district having to obtain bids.  At least one of the primary contractors hired by Titus, John Paris Construction, also functioned essentially as a general contractor and hired other subcontractors to perform work without bidding.

Forrest said that the investigation revealed that in July 2008, the newly appointed business administrator for the district began noticing inconsistencies between the invoices that had been submitted for payment by Titus through Aramark and the actual work performed. The business administrator then notified Superintendent of Schools Valerie Goger who confronted Titus regarding the inconsistencies. He admitted he had “doctored” an invoice, according to Forrest, apologized for his actions, cleaned out his office and left the district.

Aramark then began its own investigation regarding Titus’ activities in Bernards.  An internal audit conducted by Aramark and subsequently turned over to the Prosecutor’s Office, revealed a theft from overbilling of about $2.1 million from the 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 small construction business in Belford. Paris at times completed some school projects or hired other subcontractors to perform the work.  He then submitted invoices to Titus that would be processed by Aramark and ultimately submitted to the school district for payment.

Unbeknownst to Aramark, however, the invoices had been inflated by Titus to allow him to receive monies to which he was not entitled.  The difference between the actual non-bid cost of the project and the inflated amount paid by the district was given to Titus by Paris as a kickback for providing Paris with a steady stream of work here,

according to the Prosecutor's Office.

Forrest said the investigation also revealed that Paris would deposit the inflated payment checks he received into his business account in order to mask the theft of funds and disguise the transmission of  monies back to Titus.

Check-Cashing Scheme

Two separate schemes were employed by the defendants utilizing a check-cashing store in Hazlet where another defendant, Beach, was employed as a manager.

The first involved John Paris Construction checks that were made payable to cash and subsequently transmitted by a third party to defendant Caponetto. 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.   Caponetto received $100 for each of the John Paris Construction checks he cashed.

The second method employed by Titus and Paris also involved checks that were written by  Paris on his business 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.  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 it was not.

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 about $706,735. Caponetto cashed about $124,860 worth of those checks.

Forrest said detectives discovered that the proceeds from these checks were used primarily to pay off Titus’ gambling debts. 

In addition to the Prosecutor's Office, the New Jersey Attorney General’s Office, Division of Law, has also been contacted and is independently reviewing this matter.

Titus and Paris have been charged with first and 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 and third degree money laundering; third degree forgery; and third degree uttering   forged instruments. Caponetto has been charged with third degree money laundering.

Bail was set for the defendants by Superior Court Judge John H. Pursel. For Titus bail was set at  $150,000 cash or bond. He was lodged in the Somerset County Jail when he failed to post bail.

The bail for Paris is $100,000 cash or bond. The bail for Beach is $100,000 cash or bond, while bail for Caponetto is $10,000, with a 10 percent cash alternative.