A crooked place – nj.com – nj.com

The consultant was to be paid for “professional services for strategic advisory and operational planning” for the City of Orange. Just what it was for was not exactly clear. But the work did not come cheap.

“Given what is due, I recommend that the total amount owed be submitted,” the consultant messaged the city’s business administrator. “That is 16000 plus 10000 to equal 26000 for Nov n Dec.”

The proposal did not sit well with Willis Edwards III, then serving as the city’s business administrator and the guy who had retained the consultant. “Way too much. And unfair… I am in total shock,” he said.

Edwards was not looking out for the city’s best interests, according to the U.S. Attorney’s office. He was seeking to “dupe” Orange. The city administrator had retained the “consultant” to write his doctoral dissertation in education, which prosecutors say he plagiarized and passed off as his own work at Seton Hall University. Then, they allege, he had the city pay for it.

For the past five years, the Federal Bureau of Investigation has been digging deep into the finances of Orange. So far, at least eight people have been charged in connection with allegations that include fraud, conspiracy, phantom construction projects, and in one case, the rip-off of thousands in federal funds intended for a children’s literacy program at the public library.

At the center of it, according to the criminal charges that have been filed so far, was allegedly Edwards.

Edwards’ attorney, Brandon Minde of Cranford, said Edwards, who now lives in Georgia, had “served the citizens of New Jersey well” and looks forward to having his day in court.

Court documents and subpoenas, meanwhile, make it clear that prosecutors have been looking beyond those already charged.

From no-show jobs and sweetheart deals, to pay-to-play schemes that reward political contributors with lucrative public contracts, the business of government in New Jersey for some can be a game of opportunity.

In the City of Orange, though, the game was taken to another level. An examination of hundreds of pages of financial records, emails, and court filings, as well as years of municipal purchase orders obtained by NJ Advance Media, offer a graphic roadmap of payments involving friends and cronies, many tied to a wide-ranging series of schemes that included what prosecutors claim were self-serving bogus contracts or big payments used to fuel hidden kickbacks.

“You look at places like the City of Orange and you have to seriously wonder whether and to what extent corruption has actually become an ingrained endemic part of the community’s political and economic culture,” remarked Lee Seglem, the now-retired executive director of the State Commission of Investigation, which went into Orange nearly 30 years ago.

What the SCI found, he said, was that the city’s core governing structure had “basically been turned into a cash-cow political fundraising machine.”

“The depth and breadth of it were really quite astounding,” Seglem said. “It is not at all inappropriate to wonder if there’s some sort of legacy aspect to it all.”

In fact, not much has changed since the SCI investigation. Records tied to the ongoing scandal in Orange show that those involved essentially figured out how to steal hundreds of thousands of dollars, at times orchestrating payments for approval and then approving them as well, prosecutors say.

The charges filed to date allege taxpayers were ripped off through a billing scheme that played out for years in a city so devoid of adequate checks and balances that nothing was done even after the few red flags regarding what might be happening were finally raised. Companies would be created after the city approved contracts, and then quickly paid when they submitted bills.

“That saga is like a bad Netflix show,” observed Dennis T. Kearney, a former Essex County assistant prosecutor, of what has been going on in Orange. Now in private practice, the veteran attorney — who has handled his share of major white collar crime cases over the years — wondered who, if anyone, was watching. “I look at these from a fiduciary duty perspective and ask did anyone on the city council see the land mines? Or even poke around for them?” he asked.

Council members had fought against the appointment of Edwards even before the seeds of the billing schemes outlined in court documents were planted. Those interviewed about the ongoing corruption investigation said they had no real inkling that money may have been misappropriated, although some did raise questions.

While all of it was going on, though, residents were getting socked with higher taxes. From 2015 to 2020, the general tax rates in Orange — where 21.4% live in poverty and the median household income stands at $42,966 — went up by 20.5%. That marked the largest tax increase in the county.

Several of those charged in the criminal case have already pleaded guilty. The investigation continues. And an analysis of transactions documented in the city’s financial records pointed to other questionable dealings.

A recent lawsuit filed in Essex County by a former assistant city attorney whose job was to review subpoenas sent by the FBI has claimed he was fired after he found records revealing there were bids placed and accepted with the city and payments were made based on those bids, but the work was never actually done.

Orange Mayor Dwayne Warren, who has not been accused of any wrongdoing, had no comment about the ongoing investigation. A city spokesman said only that the mayor directed his administration to continue to comply with all law enforcement authorities’ requests for information and cooperation “in order for all of the facts to come to light.”

Tucked tightly between West Orange and East Orange to the west of Newark, Orange is a long-struggling place with significant poverty and troubled schools. A former mayor, Mims Hackett, went to prison in 2008 after taking a $5,000 bribe from an undercover FBI agent during a federal sting probing municipal insurance contracts.

Willis Edwards came on the scene soon after Warren’s election. A former East Orange housing commissioner and one-term Democratic state Assemblyman, Edwards was a fraternity brother of Warren and served as his campaign manager.

After assuming office, the new mayor appointed Edwards in July 2012 as the city’s business administrator, responsible for day-to-day running of Orange. When the council refused to confirm Edwards’ appointment, the mayor installed him as deputy business administrator at an annual salary of $105,000. The council then went to court, and Edwards filed his own complaint, alleging that they would not consent to his appointment because he refused to hire their friends and relatives.

While the matter remained in litigation, Edwards stayed in place for the next three years.

He apparently needed the job. Despite the high-level position with Orange and a teaching post at Essex County College, records show he had serious financial problems. In early 2013, he declared bankruptcy in a Chapter 13 filing that cited tens of thousands of dollars in student debt, unpaid credit cards, and the mortgage on his house in East Orange. Among the assets listed on his petition included just $27 in savings, a 2002 GMC Envoy with 165,000 miles on the odometer, his house, and a mastiff named “Dino.”

By early 2013, Edwards had fallen substantially behind on his home mortgage payments and was facing foreclosure. By then, according to federal court filings, he owed $378,044 on the house. Prosecutors allege that he sought rescue through a mortgage loan modification, which lenders may offer to borrowers who have experienced hardships caused by factors beyond their control. It was a side hustle, prosecutors allege. According to the indictment now pending against him, he lied about how much money he was making in order to qualify for the emergency assistance — listing only his salary from the City of Orange while omitting what he was making from Essex County College.

Based on his misreported income, the loan modification was granted. About $95,590 in debt was forgiven and the property was taken out of foreclosure.

Meanwhile, his relationship with the council was fraught from the start.

One of his first acts as deputy business administrator was to fire Assistant City Attorney John McGovern in February of 2013. At issue was a $100,000 hold against any settlement in the matter of a former city clerk on medical leave following a serious auto accident while he had been on the job, according to court filings.

Orange had paid the clerk’s medical bills and temporary disability benefits because it had been a worker’s compensation issue. But after the clerk obtained a sizable insurance settlement, he was required to return some of it to Orange because the city had a lien for the money paid out against any award from a personal injury lawsuit.

McGovern, who declined comment, argued it was illegal to waive the lien without the approval of the city council and the mayor. But in a whistleblower lawsuit, the attorney claimed he was pressured by Edwards to allow the clerk to keep the $100,000 owed to the city and its taxpayers. The attorney said Edwards confronted him “in a menacing and hostile manner” over demands that he write a letter waiving the lien — which he finally did. But he noted he was doing so at Edwards’ direction.

According to McGovern’s lawsuit, Edwards was “infuriated” at being called out over the issue and immediately fired him.

More than four years later, after a court fight ended in the state’s Appellate Division, McGovern was reinstated. He was awarded $350,000 in back pay and damages.

By that point, though, Edwards was no longer the city’s business administrator and was already under federal investigation.

Months earlier, in July 2016, a team of FBI agents showed up at the city’s library, just around the corner from city hall, with warrants in hand. They wouldn’t say why.

What sparked the FBI raid began in 2014, in a scheme that prosecutors say was orchestrated by Edwards.

In January of that year, the Orange Council adopted a resolution authorizing the mayor to submit an application to Essex County for a $50,000 federal grant to conduct a literacy program for children in the community.

The Community Development Block Grant program, or CDBG, provides federal funding through the Department of Housing and Urban Development for distressed communities. The money being requested through Essex was to be used to underwrite tutoring services for low and moderate-income families at the city’s library, a magnificent Beaux-Art and Classical Revival structure dating back to 1900 that is funded and operated by the city.

It was all a scam, according to the U.S. Attorney’s office. There was no literacy program and no tutoring. According to a federal indictment, Edwards instead improvised a plan to seek out the grant and divert the money to himself and others. Prosecutors allege Edwards had Franklyn Ore — a former member of the Orange Board of Education —create a company called Urban Partners that ostensibly would provide the tutoring for the proposed literacy program.

On paper, everything looked legitimate.

But the contract between Urban Partners and the library had been backdated to June 2014 — more than six months before the company had even been registered with the state, according to prosecutors and public records. The weekly reports on the children were fake as well, prosecutors said.

After Essex County paid out $50,000 in CDBG funds, the library gave at least $36,000 to Urban Partners, which prosecutors say never provided services of any kind. Much of the money, they alleged, instead went to Edwards as kickbacks “in exchange for his official action and assistance and violation of his official duties as an Orange public official.”

Some of the money went to an unnamed associate of Edwards, who has not been charged, according to the federal indictment.

Ore, who has since pleaded guilty to fraud, misapplying funds, and conspiracy, allegedly spent the rest of the money on himself, according to court filings, including entertainment and restaurants. His attorney did not respond to requests for comment.

The library director, Timur Davis, pleaded guilty to making false statements to HUD in connection with the literacy program grant and other payments.. His attorney also did not respond to a request for comment.

In a second case involving payments through the library, court filings show that just a few months after entering into an agreement with Essex County for the literacy grant, the city and the library obtained a second $48,000 HUD grant through the county that was to be used to replace the chiller in the library’s heating and air conditioning system, according to prosecutors.

In March of 2015, developer Shenandoah “Shane” Adams Sr., a principal of VH Electrical and Plumbing LLC, allegedly sent Davis fake quotes that claimed to be from two vendors in a scheme to make it appear that VH would replace the HVAC for less money, according to charges filed in the case. He then began collecting a series of checks from the library to pay for a job that authorities said was never done. He has been charged with six counts of wire fraud.

His attorney declined comment. “It’s an ongoing investigation,” said Shay Deshpande. “I can’t really talk about it until it’s over.”

The Orange Municipal Council began its Tuesday night meeting on September 15, 2015, as it always does, with a salute to the flag. All seven members of the council were present, as was Willis Edwards in his role as the “mayor’s designee.”

Among the items added that evening as a late-starter to the agenda was Resolution 237-207, providing for an emergency no-bid contract to JZNettech for the installation of a new $350,000 computer networking system in the city’s police and municipal court complex.

The day before, say prosecutors, Edwards had advised a senior official of the Orange Municipal Court and the acting police chief that there was an urgent need to address a potential security vulnerability in the city’s Municipal Complex’s computer network, and that JZNettech had been selected as the vendor to fix the problem.

There was no public discussion before the council. Instead, the matter was debated behind closed doors in executive session. According to the minutes of that meeting, officials were told that an audit found the current computer system’s firewalls had not been updated since 2001, and that the information was in danger of being breached. They were also told that personnel records could be accessed.

What they were not told was that Edwards, who had worked in external affairs at East Orange General Hospital, had been talking with Jeanmarie Zahore, chief of information systems at the hospital who operated JZNettech as a side business out of his home, according to federal court filings.

Then-Councilwoman Donna K. Williams was at the conference meeting listening to the presentation and had questions.

“I’m always leery of emergency contracts,” she explained in an interview, recalling the session. “You learn to raise your eyebrows. It’s a way for people to push through things without going through the normal vetting process.”

Williams, who had worked in the state’s Superior Court system, knew municipal court records were on the state’s judiciary network with its own firewalls. If there was an issue with the city’s court records, she said, why weren’t they taking it to the state? At the same time, she had her phone with her at the meeting, and began Googling the name of the guy to whom they were about to give $350,000. That’s when she learned Zahore had worked with Edwards, and that the address of JZNettech came up as a residence in Rahway.

“It just wasn’t clicking,” she said. “Who works out of their home? At least back in 2015?”

She questioned the contract.

“How was the vendor chosen?” she asked during the meeting. “And does the city have a client list from the vendor of other municipalities that they have worked for?”

More specifically, the minutes of the meeting show that she wanted to know if the city had anything at all to verify that JZNettech could even do the job.

She said Edwards assured her that the information could be provided. Then Williams asked Edwards if he knew Zahore had been the chief information officer at East Orange General. The city’s business administrator responded that he “had not done a background check on anyone.”

Then they returned to the public session and approved the resolution without discussion. Williams and two others voted ‘no.’

While vendors are not typically pre-paid for supplies needed for a project, said prosecutors, they alleged that Edwards arranged an immediate advance on the money from Orange because Zahore did not have the cash on hand to begin working. A few days later, Zahore received an initial check for $115,000.

Afterwards, he and Edwards went out together to celebrate, said prosecutors.

In the weeks that followed, prosecutors said on more than one occasion Edwards told Zahore, “in substance, that he had taken care of him” and that Zahore should consider that and do something. In November 2015, prosecutors said Zahore gave Edwards approximately $10,000 in cash. After accepting the cash payment, court filings said Edwards indicated that he was disappointed with the amount and expected more. Zahore then made a second $10,000 cash payment to the business administrator.

In a spreadsheet that booked his expenses for the project, Zahore duly listed both payments: Gift: WE, $10,000.

In October 2020, Zahore admitted in federal court to paying $20,000 in kickbacks to Edwards as a reward for steering the contract to his company. His attorney did not return calls for comment.

Even while he was pocketing money on the cybersecurity contract, Edwards had another scheme that was playing out, prosecutors charged.

In July of 2015, the Orange council awarded a $150,000 blanket contract to a Montclair planning firm for “professional planning services.”

According to minutes of the July 1 meeting, Kerry J. Coley, a retired Orange police detective who by then was a member of the council, questioned why the city was even spending the money.

“Why are we paying for a city planner when we have a city planner on staff?” he asked during a conference meeting about the measure. He was told it was work the city’s planner could not do because he had taken on the duties of the retired zoning officer.

Despite “no” votes from Coley and another member of the council, the contract was approved, records show.

But according to the U.S. Attorney, the planning company — which was not identified by name in the indictment and was not charged — was pressured by Edwards to hire Urban Partners as a subcontractor. In court filings, prosecutors said the company was made to pay Urban Partners $50,000 per year for three years, conditioned on the receipt of funds from Orange. After Ore received $33,220 in payments, he gave some of that money in kickbacks to Edwards, according to the federal complaints in the case.

In an interview, Coley, who unsuccessfully challenged Warren in the last mayoral race and now serves as council president, said he never suspected there might be something more behind the planning contract when he raised his objections. In fact, he did not remember much about the vote.

“It was probably me questioning why are we duplicating services,” he said, adding that the city’s professionals were expected to have vetted it all out before it came to the council. “I just vote on the facts that came before me.”

Long before he began working for Orange, Edwards had briefly been in a doctoral program at Seton Hall for a single semester, in the spring of 2010, according to university officials. After his appointment as business administrator, he returned to the university in the summer and fall of 2015 to resume his studies.

Soon, the bills for his tuition began appearing as expenses that the city was picking up, according to Tyrone Tarver, then serving on the city’s Citizens Budget Advisory Committee. He said he had been reviewing a list of city payments when he saw two checks that had been written to Seton Hall and to another university for tuition on behalf of Edwards.

“I didn’t think anything was going on, other than I knew he was in court,” Tarver said in an interview, referring to Edwards’ still ongoing lawsuit with the council over its claims that he was illegally hired by the mayor. “If he’s removed from office, why did the council approve this? Why did this expense get approved?”

He raised the matter at a committee meeting.

“Everyone kind of looked at each other,” said Tarver, a former member of the Orange Board of Education. “The council is supposed to review these bills every month. It didn’t sit well with me.”

Federal investigators later alleged that between December 2015 and July 2016, Edwards sought to defraud Orange of $25,142 in tuition payments he was not authorized to receive related to his graduate work, even after he was forced to resign from his position as business administrator. According to filings, the scheme included backdating a memo purportedly from the mayor to give the impression Edwards had received approval for Orange to pay for coursework in which he had enrolled.

Stranger still was the plagiarism scheme in connection with his graduate studies.

In June of 2015, say prosecutors, Edwards reached out to Isaac Newton, the brother of another doctoral student at Seton Hall, seeking help with his dissertation. Newton sent back a two-page “statement of purpose” written by one of his associates for Edwards’ dissertation proposal.

Shortly afterward, Newton came up with a price for Edwards.

“He has to pay 28-30K for the entire document,” he emailed. “I can give you something good out of this deal.”

Edwards balked at the cost, said prosecutors. But later that same day, he suggested another idea. Newton could do consulting work for Orange. The academic papers would be invoiced as planning work and the city would pay him, authorities said.

And indeed, that’s what happened. City hall records show that Orange paid Newton $67,000 in six checks for “project development design” between September 2015 and March 2016, after Edwards had resigned from his position in the city in December.

Newton was indicted in September 2020, but the charges remained sealed until April of this year because he was out of the country for all that time. His attorney, Michael Baldassare, said Newton was “a highly educated and well-respected member of the community” who had voluntarily returned to the United States to defend himself.

“He is innocent, and we expect a full vindication at trial,” Baldassare said.

Edwards never completed his doctorate, according to Seton Hall officials.

He did not return to Seton Hall in the spring of 2016. And by July of that year, the heat was being turned up when the FBI showed up unannounced at the Orange Public Library with subpoenas.

Among those named in the subpoenas was Willis Edwards.

Five years after the FBI raid, Edwards faces a reckoning.

He resigned as business administrator in December 2015 and after years of litigation, was ordered to pay back $268,000 he had been paid as deputy business administrator in what a judge found was an illegal appointment. City officials say the money has yet to be paid back

Far more serious is the 61-page, 31-count indictment against Edwards that lays out a litany of charges ranging from allegations of conspiracy and fraud, kickbacks and bribery, and cheating on his taxes.

Edwards’ attorney, Brandon Minde, a former assistant prosecutor who has handled matters of corruption, fraud, and government misconduct, said Edwards is a professional with a Bachelor of Arts degree from William Paterson University and a dual-master’s degree in Finance and Advance Business Management from Columbia University.

“His past service to the citizens of New Jersey includes helping to revitalize the City of Orange by serving as the business administrator, as well as serving as a New Jersey General Assembly Member, vice-president of East Orange General Hospital, and a former executive with the Port Authority of New York and New Jersey, “ Minde said in a statement. “This is in addition to serving as a mentor to students during his 25 years as an adjunct professor at various New Jersey colleges and universities. In each of these positions he has served the citizens of New Jersey well.”

Adams and Newton are also awaiting trial. Two others tied to the case also face tax fraud charges. Ore, Zahore and Davis have pleaded guilty in their respective cases. No one have been sentenced.

The U.S. Attorney’s office declined comment.

Thomas Calcagni, a former federal prosecutor with long experience in corruption cases, said the extent of the ongoing investigations and prosecutions in the city of Orange “suggests the feds are working with an informant or cooperator. That person is likely someone on the inside of the city’s administration, who’s proven him or herself reliable in providing information.”

It does not reflect well on the city, added Calcagni, suggesting that the continuing drumbeat of charges was “emblematic of an administration with loose controls and low emphasis on ethics.”

Today, meanwhile, many in Orange are awaiting to see if there will be additional charges.

Coley wonders why the matter still drags on and when it will end.

“It was very, very disheartening when this all came out,” said the council president. “Maybe it’s a wider net than we know.”

__

Local journalism needs your support. Subscribe at nj.com/supporter.

Ted Sherman may be reached at tsherman@njadvancemedia.com. Follow him on Twitter @TedShermanSL