A bribery scheme orchestrated by a senior investigator with the N.J. Department of Labor & Workforce Development (NJDOL), Division of Wage and Hour Compliance netted almost $2 million in cash and property before being shut down by investigators.
Joseph Rivera, 53, of Winslow, a senior investigator with NJDOL, has pleaded guilty before U.S. District Judge Noel L. Hillman to one count each of solicitation and acceptance of a bribe and tax evasion. He was released on a $100,000 bond pending sentencing, scheduled for July 6.
As a senior investigator, Rivera's responsibilities included inspecting temporary labor firms working in southern New Jersey to verify compliance with state wage and hour laws and with regulations regarding taxes and workers' compensation insurance.
At his plea hearing, Rivera admitted that between 2002 and late 2008, he solicited and accepted cash from at least 20 owners or operators of temporary labor firms. In exchange, he did not perform the required inspections and falsely certified that they were in compliance with state and federal regulations. He said he typically calculated the amount of the bribe by multiplying 25 cents by the total number of hours worked by a temporary labor firm's employees. Rivera also recommended these firms' services to other businesses.
Rivera also pleaded guilty to tax evasion, admitting that for tax year 2007 he filed a return that claimed taxable income of approximately $89,696, when he knew his total taxable income was approximately $499,176, upon which he owed some $149, 677 in federal income taxes.
As part of his plea, Rivera will forfeit monies and property equal to $1.863 million, which investigators say represents the proceeds he obtained through the bribery scheme. The forfeitures include $120,400 in cash; two Ocean City, N.J., properties; a Fort Lauderdale property; a 2008 Lexus ES 350; eight gold plates; and an extensive collection of gold and silver coins.
A second field investigator, James Peyton, 71, of Salem, N.J., has been charged with one-count of solicitation and acceptance of a bribe. Peyton's job in the NJDOL Division of Employer Accounts involved conducting audits of employer books and records, reviewing quarterly payroll tax filings, and taking other steps to ensure employer compliance with various payroll tax laws. According to the Complaint, Peyton began accepting cash bribes in 2005 and took as much as $8,000 in cash per quarter.
Three people from the temporary labor firms involved also were charged as a result of the investigation. Yohan Wongso, 27, of Philadelphia, pleaded guilty before Judge Hillman to bribery. Wongso admitted that from 2006 through 2008 he worked at several temporary labor firms, during which he paid bribes to Rivera and Peyton. Judge Hillman released him on a $50,000 bond pending sentencing, scheduled for July 6.
Two other Complaints separately charge Channavel "Danny" Kong, 37, and Thuan Nguyen, 37, both of Philadelphia, with making bribe payments to Rivera. According to those Complaints, both defendants paid the bribes to Rivera so that he would not audit the temporary labor firms they operated.
The bribery charges carry a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice any pecuniary gain to the defendant or loss to any victim, whichever is greatest. Rivera's tax evasion charge carries a maximum statutory penalty of five years in prison and a fine of $250,000. Nguyen was charged with interstate travel in aid of racketeering, which carries maximum statutory penalty of 5 years in prison and a fine of $250,000 or twice any pecuniary gain to the defendant or loss to any victim. According to the attorney general's Complaint, parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all of that time.
Acting U.S. Attorney Ralph J. Marra said that investigations by local IRS and FBI agents led to the guilty pleas. Greg Reinert, spokesman for the U.S. Attorney's office in Camden, noted that the attorney general's office has prosecuted well over 130 corruption cases involving public officials (state, municipal, federal) in the last five years without a loss.
A spokesperson in the office of State Labor Commissioner David J. Socolow reported that Rivera and Peyton were suspended without pay pending the outcome of criminal charges, following a Loudermill hearing on April 7. Prior to the hearing, the two had been suspended with pay. A Loudermill hearing (from the U.S. Supreme Court 1985 ruling in Cleveland Board of Education v. Loudermill) is required when a public sector employee may have a loss of pay due to a suspension, termination, or demotion. In the original Court case, the justices held that employees with a "property interest" in their jobs are entitled to certain due process rights prior to termination.
In New Jersey, conviction of crimes of the first, second, third or fourth degree carry mandatory termination of the crime is committed in relation to the person's employment. If employee is being charged with something that carries a sanction of removal, and circumstances warrant an immediate suspension, the Loudermill hearing can determine whether the employee will be suspended pending the outcome of the disciplinary appeal hearing, and whether the suspension will be with or without pay.
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