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Former Toms River Schools Insurance Broker Pleads Guilty to Fraud, Admits Payments to Ritacco

Francis X. Gartland admits to mail fraud, conspiracy to defraud the IRS and perjury.

Francis X. Gartland admitted in federal court today that while he served as the insurance broker for Toms River Regional Schools he funneled bribes through a series of intermediaries to then-superintendent .

The payments were in excess of $1 million total from 2002-2010, announced the U.S. Attorney's Office.

Gartland, 70, had pleaded not guilty previously and was awaiting trial, scheduled to begin in a week alongside Ritacco, in a 27-count federal indictment that alleged bribery, kickbacks, fraud and tax evasion.

Admitted to Ritacco Payments, Conspiring With Others

The district's former insurance broker pleaded guilty today before U.S. District
Judge Joel A. Pisano in Trenton federal court to charges of mail fraud, conspiracy to defraud the IRS and perjury.

U.S. Attorney Paul J. Fishman announced Gartland's plea. He said Gartland, while insurance broker for the Toms River Regional School District, admitted his role in a scheme to pay bribes and other benefits to the then-superintendent of schools to get and maintain a contract to provide insurance services for the district.

In the court documents and statements released this afternoon, Gartland admitted to his role with co-conspirators who paid $1 million to $2 million in bribes to Ritacco in exchange for inflated insurance contracts from 2002 to 2010, according to Fishman.

The co-conspirators named are Frank D’Alonzo, a former administrator at the Toms River Regional School District, Frank Cotroneo, 61, an insurance broker, and others.

"The payments were made to allow Gartland to obtain and keep the insurance contract with the district," according to a release from Fishman's office announcing the plea.

According to the U.S. Attorney's Office:

  • Gartland admitted that in 2002, he, Ritacco, Cotroneo, and D’Alonzo agreed to have Ritacco approve a workers’ compensation insurance contract. That contract, between Gartland and the school district, had contract fees that would yield $500,000 to $600,000 per year in excess fees, which would be used to pay bribes and kickbacks to Ritacco.
  • Gartland admitted his role in conspiring with Ritacco to defraud the IRS by hiding these bribes and other benefits that were paid to Ritacco, and to other individuals at Ritacco’s direction.
  • Gartland admitted he and Ritacco, 65, used a series of shell companies and intermediaries to conceal the payments.
  • Gartland admitted to filing fraudulent individual tax returns for tax years 2004 through 2007.

Ritacco Trial Scheduled for April 9

Gartland's sentencing is scheduled for July 9. In Ritacco's trial, jury selection is scheduled to begin April 9 in Trenton.

According to Fishman, the mail fraud to which Gartland pleaded guilty is punishable by up to 20 years in prison; on the conspiracy charges, up to five years in prison; and on the perjury charge, up to five years in prison. All the counts are also punishable by fines of $250,000.

Calls placed to Toms River Regional Schools spokesperson Tammi Millar and Ritacco's attorney William Hughes Jr. were not immediately returned.

U.S. Attorney's Office spokesperson Matthew Reilly would not comment further on how today's guilty plea would impact the coming trial.

"It's not our policy to comment," Reilly said by phone. He said there are no further motions scheduled as part of the court calendar until jury selection begins.

Gartland and Ritacco's respective attorneys previously requested the court sever their charges and try them separately. However the motion to sever was not heard due to illness of Gartland, and according to court documents the joint trial remained with a April 9 start date.

Gartland Admits to Election Fraud

In today's announcement, Gartland also admitted to his role in corruption charges elsewhere.

to a scheme to funnel thousands of dollars in illegal campaign contributions to the Democratic primary election campaign of Joseph Vas, 57, who was running for Congress in 2006.

Gartland admitted he and co-defendant Thomas O’Leary, the former executive director of the South Amboy Housing Authority, hatched a scheme to provide "straw payments" to the Vas campaign.

Gartland was the insurance broker of record for the City of Perth Amboy, where Vas was mayor, and during that received thousands of dollars in commissions for those insurance contracts. Gartland split those commissions with O'Leary, Fishman said in the release, to "ensure that Gartland maintained the lucrative insurance brokerage representations with the City of Perth Amboy and the Perth Amboy Board of Education."

Pleading Guilty: Another Insurance Broker Admits Funneling Payments

to a related charge in the alleged Gartland-Ritacco scheme.

Amenhauser, 66, admitted he made monthly $3,000 payments to D'Alonzo and $6,000 monthly to Gartland, which Gartland directed him to do, Fishman said.

As a former insurance provider, Amenhauser was pressured by Gartland to make these payments in order for Amenhauser to obtain and maintain his insurance service contract with the Toms River Regional School District, according to the plea.

"Amenhauser made these payments, believing that unless he made them he could not retain his contract with the Toms River school district," according to the indictment.

Amenhauser pleaded guilty March 27 to making false statements to the FBI when questioned about the payments, which occurred in May 2002 after  Ritacco hired Amenhauser to provide workers compensation consulting services to Toms River Regional.

Amenhauser awaits sentencing June 26. The charge is punishable by a maximum of five years and fines of $250,000.

1stcav April 04, 2012 at 12:51 PM
Because they all think there above the law and have friends in high places .But did you see how QUICK , CC left Mike at the alter having that" FUND Raiser " @ the SSP Million Dollar home of MJR. All Mike's former friends are staying away and not calling, wounder why ???? Ah- surveillance and wire taps ring any bells , bills are high for those throw away phones..Got any Pigeons hanging around, No -not for food ( Italian thing ) , but for messages," Homing birds" could work Bada bing...I'll bet there's an Agent ( FBI ) with a cross bow watching the Mansion, just in-case..BSA & FBI motto..be prepared....LMFAO !
teatleytea April 04, 2012 at 02:34 PM
To all who were planning to attend the Committee meeting tonite...the meeting has been cancelled! There has not been a reschedule date yet! Look out taxpayers these sneaky members are going to try and have this meeting while school is closed for Easter break.
dave April 05, 2012 at 12:24 AM
he will be going to a BIGGER house,,move over bernie madoff,company comming
George Schuck April 16, 2012 at 06:07 PM
nice to see that superintendent Michael Ritacco , finally stood up like a man and admitted his guilt in the insurance fraud I guess our school board members has nothing to say when insurance is being purchased for the school district , they seen nothing they knew nothing and they did nothing , these six members are still sitting on the school board in 2012 I call then the Ritacco six, if they knew nothing they were not doing the job that they were elected to do, I believe the decent thing for these six Ritacco members to do is resign from the school board
Scott September 13, 2012 at 02:55 PM
Let's not forget that the two main objectives, as a school board member, is to develop a budget for public approval and also establish school policies. I do agree with you to a point, however you should be questioning the NJSBA "New Jersey School Board Association" and the NJASBO "New Jersey Association of School Business Officials" . With the NJSBA, they have an audit team who oversees the financials. Where were they?

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